Top Three Benefits from using VA-backed loans
So – The U.S. Department of Veterans Affairs (VA) offers backing for home loan purchases for certain servicemembers and veterans: but why are these loans so appealing?
- Avoid a down payment! While not universally true, many VA-backed home loans will allow the lender to avoid requiring a down payment on the property. Why? Put briefly – the VA backing of the loan acts as a level of security that would normally be served by requiring the down payment itself.
There are also, often, more relaxed requirements regarding credit scores. The VA doesn’t require a minimum credit score, although a private lender may. That said – the VA backing of a home loan normally allows a lender to require less in the way of credit score.
- VA Home Loan Guaranty can be re-used! That’s right – under certain circumstances a VA home-loan guaranty can be re-used (making it not a one-time decision).
- Avoid mortgage insurance. Lenders require, in many circumstances, mortgage insurance as a form of safety net. However, with VA loan guaranty this requirement can normally be avoided.