What you stand to gain with a VA Home Loan
As a veteran or a military service member, a loan by the VA is one of the best options at your disposal to get your home and thus stabilize your future. While it is obvious that such a loan guarantee comes with an array of advantages, understanding what exactly all of them are would help you make a better choice when you go about buying your own house or trying to afford your existing one.
100% financing along with no set limit by the Veterans Affairs
One of the best features that these loan guarantees by the VA come with options to finance your home to 100% of its value. This simply means that it is not mandatory to put down any payments prior to starting your mortgage. Additionally, there are no loan limits by the VA; yet private lenders may have their own sets of limits for deciding a maximum amount.
Full cash-out refinancing available
The VA also allows you to get exactly 100% cash-out refinance- and, unlike other loans in which this comes with a hefty fee, you need not pay anything extra in a VA loan. Lenders, however, may have their own limits that may be close to 90%, if not lower.
Rate reduction and easy refinancing
The IRRRL or the Interest Rate Reduction Refinance Loans allow you to get your loan at a cheaper rate, even if the rate comes down after you have taken your loan. When you do that, you will also need not get any incomes verified or go through appraisals and credit history checks.
Fully assumable loans without any minimum credit score requirement
For getting this loan, the buyer needs not be a veteran either- for anyone who is qualified enough can assume them. All that is required for the same is to get approval beforehand by the VA and the lender. Additionally, for getting a VA loan, you need not have any minimum credit score, and even an okay credit history will be enough to get it. Lenders, however, prefer those with a credit score north of 620.
Fixed as well as adjustable costs of mortgage with zero prepayment penalty
There are both adjustable and fixed rate of mortgages that you can get with VA Loans. Additionally, easy refinancing of a VA loan is also possible since there are no pre-payment costs associated with it.
No need for monthly mortgage insurance payments
With the VA guaranteeing this loan, your lender will have greater confidence and thus you will not require any form of mortgage insurance that is there to protect the lender. This means lesser monthly charges and payments for you.
Other benefits of getting a VA loan include addition of $6,000 for more improvements including energy-efficient measures, additions for improving the house in general and so on. Understanding all of these is the key to making sure that you get the best out of the VA home loan benefits that are there for you.