6 Biggest Benefits of a VA Loan


Thomas Short
Military VA Loan contributor

Of all the mortgage programs available, it’s difficult to top VA loans. Available to millions of veterans, spouses, service personnel and more, this home loan offers tons of benefits that other mortgage can’t meet.

Home buyers who are eligible might not know much about VA loans, and many don’t even know the program exists.

There will always be one mortgage option that’s best for home buyers, so learning more about each option is the best way to find out which is right for you. Here are some of the biggest benefits of VA home loan:

Check current VA mortgage rates.

No down payment

Perhaps the biggest benefit of VA loans is that they don’t require a down payment.

Other popular loans, like FHA or conventional, require a down payment of at least 3.5%, and some may require even more down. Down payments are one of the biggest factors that keep home buyers from being able to afford a mortgage.

With a VA loan, you can finance up to 100% of the total purchase price.

What’s more, the funding fee required at closing can also be financed, cutting the total upfront cost of a home even more.

No mortgage insurance

Unless you make a down payment of 20%, most loan programs require you to pay monthly mortgage insurance. This adds to the total cost of the home, and it can be difficult to get rid of.

But the VA takes care of this by backing the home buyer, and this means no monthly mortgage insurance payments. These costs are typically upfront and monthly, so you can save money in the short and long run with a VA loan.

Lower credit requirements

The VA doesn’t explicitly require a minimum credit score, meaning anyone can be eligible. However, lenders will want to see credit scores of 620 or higher before they approve a VA loan.

But a VA home buyer still tends to get more leeway with credit scores. In January 2018, the average FICO score on closed VA loans was over 40 points lower than conventional loans.

On top of that, VA loans tend to be easier to qualify for than other loan programs. This is thanks to the VA guaranty, meaning the Department of Veterans Affairs assumes a lot of the risk to make it easier for you to buy a home.

Lower than average mortgage rates

Another way home buyers can save money with a VA loan is because of their competitive interest rates. In January 2018, VA home loans closed with an average mortgage rate 26 basis points (0.26%) lower than the next closest (FHA loans).

Check today’s VA rates.

No prepayment penalties

Most loan programs will charge you a penalty if you pay off your mortgage early. For VA loans, this isn’t a problem.

So, if you happen to come into some money, or you’ve saved up and want to get rid of your monthly mortgage payments, you can pay off your VA mortgage without any type of financial penalty.

Lifetime eligibility

A common myth with VA loans is that you can only ever get it once in your life. This is far from true, and many home buyers who are VA eligible buy more than one home through the program.

For example, a veteran can get a VA loan for themselves, and if they pay it off and decide to move and buy a different home, they can use the VA again to get the benefits.

Also, those who are eligible for a VA loan are also eligible for VA refinancing, just another type of loan program that can save veterans and active military members money.

Is VA the best mortgage option?

All things considered, VA loans tend to have much better benefits than other loan programs. For home buyers that want to make a low down payment (or avoid it entirely), VA loans beat out FHA loans.

However, every home buying situation is different, and depending on a number of factors, different mortgage options can make more sense.

Before deciding for or against a VA loan, talk with lenders to find out more about the VA program and see if it’s the right fit for you.

Click to connect with multiple VA lenders.