27 Dec 5 Unknown Facts About VA Loans
Only approximately 6% of the country’s more than 21 million Veterans and Servicemembers purchased a home utilizing a VA home loan in the previous five years. That proportion might be much greater.
For a variety of reasons, eligible Veterans frequently forgo the program as a feasible alternative.
First, they might not be aware of all the benefits. Second, people could believe applying for a VA loan is a complicated process that should be avoided. Finally, some lenders either don’t take the time to educate Veterans about the program or aren’t very knowledgeable about it. Non-military house buyers wish they had access to the VA home loan program.
And, if you are still clueless about this noteworthy program, here are the five unknown facts about VA loans that can help you buy your home without making a downpayment:
Say No To Down Payment & Private Mortgage Insurance
These are possibly the VA loan’s top benefits. No down payment is required. Most loans, including FHA and conventional loans, call for a minimum of 3.5 percent to five percent down. That adds up to $12,500 when buying a property for $250,000.
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Using a VA loan allows you to purchase immediately rather than waiting years to save up a down payment. You can also avoid expensive mortgage insurance costs by using a VA loan. According to MGIC, a provider of private mortgage insurance (PMI), at 5% down, a $250,000 home would cost $150 per month to maintain.
Simply removing PMI, the buyer could afford a property worth $30,000 more with a VA loan and the same monthly payment. Using a VA loan, you can significantly boost your purchasing power and save money upfront.
VA Loans Can Be Borrowed Several Times
Your VA mortgage advantage is not temporary. It is available for as many uses as you like. How?
Let’s say you used a VA loan to buy a house. But now that you’re too big for the home, you need a bigger place. You can utilize your benefit to purchase another house when you sell your current residence and pay off the VA loan entirely. Your rights can be fully reinstated.
But there are other ways to reuse your benefit as well.
When they pay off the VA mortgage but keep the house, qualified Veterans and Servicemembers can receive a one-time restoration. If you bought the house in the past and paid off the debt, this scenario applies. It still holds true if you refinanced your VA loan using a non-VA lender.
In some situations, you can maintain the house and continue to benefit from VA home loans.
Your VA Loan Benefit Never Expires
Once you get qualified for a VA home loan, you are always eligible for one. Many veterans who served twenty, thirty, or even fifty years ago question if they may still purchase a home today if they never utilized their benefit. The answer is affirmative if eligibility can be proved.
The amount of time you have served and the time frame during which you served determine your eligibility. For instance, a veteran of the US Army who served in Vietnam for at least 90 days is probably qualified.
Get your DD Form 214 first before checking your eligibility. With that proof in hand, you can ask a VA-approved lender to get you a VA Certificate of Eligibility or do it yourself on the VA’s eBenefits website. Even if you served long ago, you could qualify for a VA home loan to purchase a home.
Surviving Spouses Are Eligible For This Benefit.
In 2015, more than 3,000 surviving spouses used their deceased partner’s VA payout to buy a home. Spouses of Servicemembers who were killed in action and haven’t remarried are eligible to purchase a property with no down payment and no mortgage insurance. Additionally, there is no VA financing cost.
The spouse of a slain hero cannot be compensated, but this benefit undoubtedly aids them in recovering from the sorrow.
VA Loan Rates Are Extremely Low!
The rates for VA loans are typically 0.25 percent less than those for regular loans. Mortgages that the VA backs are less risky for lenders, and veterans benefit from those savings.
Further lowering the risk for lenders, VA loans have some of the lowest foreclosure rates as well. Veterans and active military personnel prioritize homeownership, which is not surprising. For those who choose a VA loan, these elements combine to result in reduced rates and manageable payments.
Summing It Up
There are actually a lot more reasons to use the VA loan advantage than those listed in the previous five facts. You most definitely deserve it.
It is difficult to repay the freedom that has been granted to this nation by past and present military personnel from all branches. However, consider this program a modest “thank you” for your devotion and commitment.