Those who are getting ready to buy a home and want to use a VA loan will be interested in knowing these five facts about it.
#1: No Mortgage Insurance Premiums
Conventional loans include mortgage insurance. This inclusion also has premiums. This can be anywhere from .3 to 1.15 percent of the loan amount. With a VA loan, you do not have to pay for mortgage insurance, which saves you a significant amount of money.
#2: The VA Does Not Set Minimum Credit Score Requirements
Most lenders want you to have at least a 620 credit score for a mortgage, but not the VA. Since you are or were in the military, they rest easy knowing you have a stable income.
#3: Low Interest Rates
Interest rates tend to be a bit lower than you’ll find with conventional loans. This can save you a lot of money throughout the length of the loan.
#4: No Payoff Penalties
Some lenders will charge you a penalty if you pay off your loan early, but not the VA! You can pay as much as you want on your mortgage, as long as it’s more than the minimum, to pay off your loan as soon as possible. Again, this can save you a lot of money.
#5: NO Down Payment *
This is one of the most helpful benefits of the VA loan — NO down payment. Many people can’t buy a home because they don’t have the thousands of dollars to pay for the down payment. With the VA loan, you do not have to worry about that. *Closing costs and fees may apply.
Take Advantage of the VA Loan
If you have not used your VA loan to purchase a home, it’s worth looking into — even if you are still enlisted and may be reassigned. The home you purchase can turn into a rental property when you get stationed somewhere else. The VA loan has far too many benefits to simply not use.
Just let your real estate agent know you are either active duty military or retired. You will likely still need a pre-approval letter, but it will be much easier to get one.
Want more information? Primary Residential Mortgage is here to help.