22 Mar A Brief On VA Purchase Loans- From Benefits To VA Loan Rates
VA loan rates are always fluctuating and might change several times a day; however, the US Department of Veterans Affairs ensures that these rates are competitively lower than those offered by conventional loans. Available in various forms like VA purchase loans and refinancing options, VA loan programs provide numerous benefits like no PMI requirements, 0 down options and flexible guidelines.
Before moving on to what exactly is a VA purchase loan and its interest rates, let’s talk about this program’s eligibility criteria.
Who Can Qualify For A VA Loan?
VA loan programs are intended to assist Veterans and military members to purchase their dream home without paying any down payment. However, to reap these benefits, one must apply for the Certificate of Eligibility.
Qualifying for a COE will require an applicant to meet either of the following requirements-
- You are a current/former military member who has either served at least 181 days in peacetime or 90 days in wartime, OR
- You are a current/former reservist with at least six years of experience, OR
- You are a surviving spouse of a military member who either went MIA, was a POW or died on-duty, OR
- You are a Veteran suffering from any service-related injury or disability.
What Is A VA Purchase Loan?
VA purchase loan is a 0% down home loan facility offered by the VA to help Veterans purchase their new homes.
Apart from having no down payment options, VA purchase loan offer benefits like-
- Lower Interest Rates: The VA ensures that the VA loan rates are always the lowest in the market.
- VA Guarantee- These loans are provided by VA-approved private lenders and are guaranteed by the department.
- No Loan Limits- VA purchase loans comes without limits. Simply put, if an applicant has full entitlement, he/she can borrow the loan even for the most expensive property.
- No PMI Requirements- Most of the conventional loans require you to pay PMI (Private Mortgage Insurance) unless you are willing to pay a 20% downpayment. However, VA loans won’t require you to pay PMI, even if you opt for 0% downpayment options.
- Other Benefits- These programs also offer benefits like no pre-penalty charges and lower closing costs.
How To Use A VA Purchase Loan?
If you stand eligible for a VA-backed purchase loan, you can use the loan amount for the following purposes-
- Purchase a home, up to 4 units
- Purchase a lot
- Purchase a condo or duplex
- Purchase a house and renovate it
- Purchase add-ons like new equipments
- Refinance your existing VA-loan to get even lower VA loan rates
Interest Rates For A Purchase Mortgage
VA purchase loans are available either for a 15-year or 30-year plan. Opting for a 15-year fixed purchase loan will significantly drop your interest rates.
VA loan rates are always on the change; however, an average estimate for a 15-year plan can range somewhere from 2-3%.