22 Jan Why Should You Choose VA Loans Over Conventional Loans?
What makes a VA home loan better than a conventional loan? There are not one but many reasons that put VA loans ahead of other home loans. Here are a few noteworthy facts about VA loan benefits that you should know –
82% of VA loans require no down payment
When applying for a conventional home loan, lenders often require the borrower to make a down payment against the loan. However, VA loan borrowers are not asked for a down payment or private mortgage insurance as the Department of Veterans Affairs backs the loan.
Nearly half of the VA loan applicants choose to refinance an existing mortgage.
Private lenders offer two refinancing options to VA loan borrowers – Refinance an ongoing VA loan or an existing mortgage into a VA loan. Refinancing an existing mortgage into a VA loan can save you thousands in monthly payments.
Borrowers don’t have plenty of cash in their accounts.
The VA’s annual benefit report suggests that most Veterans don’t have huge cash in their bank accounts or high-valued assets when they apply for a loan.
Bankruptcy or foreclosure doesn’t impact approval chances.
Usually, you may not be able to qualify for a conventional loan for at least two having faced bankruptcy or in case of a loan foreclosure. However, you may be eligible for a VA loan after just one year.
Housing crisis has increased VA loan demands.
VA loan volume has skyrocketed in the last three years. The VA has guaranteed almost 707,000 loans in the previous year. What makes VA home loans a popular choice is its ‘no down payment’ offer and flexible eligibility requirements.
Many Veterans are still unaware of VA loan benefits.
Despite so many loan approvals every year, a significant population of army officers isn’t aware of VA loan benefits. As per a VA survey, 1-in-3 home buyers knew nothing about VA loans.
VA loans are leaders in foreclosure avoidance.
Several banking and loan surveys have proved VA loans to be the most reliable lending product for the last eight years. The VA also pays attention to the financial health of the borrowers. To qualify for VA loans, borrowers must have a residual income so that they can meet their monthly obligations.
The VA suggests lenders work with borrowers to avoid foreclosure.
The Department of Veterans Affairs asks the lenders to work in tandem with borrowers to avoid foreclosure. The VA’s effort has helped more than half a million Veterans and military families keep their homes and saved billions of dollars in potential foreclosure claims.
Some Veterans qualify for property tax exemptions or VA funding fee compensation.
The VA funding fee is the only upfront cost borrowers need to pay to qualify for a VA home loan. However, some veterans may also get compensation on the funding fee or get their funding fee attached to the loan amount.
VA home loan benefits are a blessing for Veterans and military families looking to buy their first home. Reach out to our experienced VA loan advisors to check if you qualify for the home loan.