10 Things Borrowers Wish They Knew About VA Loans
Veterans and active-duty service members who have served in the U.S. military are entitled to a range of benefits, and one of the most significant is the VA loan.
VA loans provide a big opportunity for eligible individuals to purchase a home with little to no money down, competitive interest rates, and other valuable perks. However, despite their incredible benefits, there are certain aspects of the VA loan process that borrowers may want to pay attention to as they begin the process.
If you’re considering a VA loan, here are 10 things to know before diving in.
Check your VA home buying eligibility. Start here (May 21st, 2025)1. VA loans don’t require a down payment
One of the most attractive features of a VA loan is that it often requires no down payment. While conventional loans and FHA loans typically require a down payment of at least 3% to 20%, VA loans allow qualifying borrowers to purchase a home without having to put money down upfront.
This can be a huge advantage for borrowers who may not have enough savings for a large down payment but still want to achieve homeownership.
2. No Private Mortgage Insurance (PMI)
Unlike many other loan types, VA loans do not require private mortgage insurance (PMI), even with no down payment. PMI can add hundreds of dollars to your monthly payment on a conventional loan, but with a VA loan, you avoid this extra cost, keeping your monthly payments lower and more manageable.
3. The VA loan is not a one-time benefit
Many veterans assume that the VA loan is a one-time benefit, but that’s not true. You can use your VA loan benefit more than once throughout your life.
After paying off one VA loan, you can use your entitlement again to purchase another home. In fact, you can even use your entitlement to buy multiple properties at the same time if you qualify for multiple loans.
4. There can be limits to how much the VA will guarantee
While VA loans are incredibly flexible, there are limits on the amount the VA loan will guarantee. These limits depend on the county where you’re purchasing the home and are based on the conforming loan limits for that area.
If you exceed the county limit, you can still get a VA loan, but you may need to make a down payment for the difference between the home price and the VA loan limit.
5. You don’t have to be a first-time homebuyer
Veterans don’t have to be first-time homebuyers to qualify for a VA loan. Whether you’ve owned a home in the past or are purchasing your first home, the VA loan program is available. The primary requirement is that you have an eligible service history and meet the other necessary criteria.
6. VA loans have competitive rates
VA loans tend to have lower interest rates compared to conventional loans, which means you could save thousands of dollars over the life of the loan. This lower rate is one of the key benefits of the VA loan program and can help you achieve significant savings on your mortgage.
7. VA loans can be used beyond just purchasing a home
Many people think that VA loans are only for purchasing homes, but that’s not the case. VA loans can also be used for refinancing existing mortgages, including cash-out refinances.
Additionally, you can use a VA loan to make necessary home improvements or even to build a home, as long as you meet the program’s requirements.
8. There is a cost to obtaining a VA loan
While the VA loan doesn’t require PMI, it does have a VA funding fee. This fee is a one-time cost that is typically rolled into your loan amount. The funding fee helps cover the costs of the VA loan program. It varies based on the type of loan, the borrower’s military status, and whether they have a down payment. Veterans with disabilities may be exempt from this fee.
9. The VA loan is not a guarantee
While the VA loan program offers amazing benefits, it’s not a guarantee that you’ll automatically be approved. Like any mortgage, you must still meet the lender’s credit, income, and debt-to-income ratio requirements.
Additionally, the property you’re purchasing must meet the VA’s minimum property standards to ensure it’s safe, livable, and structurally sound.
10. You can use the VA loan for multi-unit properties
Did you know that you can use a VA loan to buy a multi-unit property (up to four units)?
This can be a great investment strategy for those looking to generate rental income. You can live in one unit and rent out the other units, helping to offset the cost of your mortgage. This makes the VA loan a great tool for future homeowners who are interested in building long-term wealth.
Check your VA home buying eligibility. Start here (May 21st, 2025)The bottom line
The VA loan is one of the most powerful tools available to veterans and service members when it comes to purchasing a home. Understanding the ins and outs of this program, including its unique benefits and requirements, can give you a significant advantage during the homebuying process.
If you’re a veteran or active-duty service member, it’s worth exploring your eligibility for a VA loan. Whether you’re buying your first home, refinancing, or investing in property, the VA loan program can be a great way to achieve your homeownership goals.
Just make sure to research thoroughly, understand the costs involved, and work with a lender experienced with VA loans to make the most of this incredible benefit.
