As recompense for entering the military, VA loan benefits were created in 1944 as part of the GI Bill of Rights. VA mortgage loans are guaranteed by the United States Department of Veterans Affairs and were designed to help veterans and surviving spouses purchase properties with little out-of-pocket expense. The program has changed over the years, but it continues to be a popular financing option for both active duty and retired military personnel.
What are the top 4 benefits of using a VA loan?
- No down payment is required. VA offers 100% financing for residential properties priced up to $484,350 (as of February 2020). No down payment doesn’t mean that you won’t need some money for your home purchase, though. There’s still the expense of inspections and closing costs to deal with.
- No PMI or private mortgage insurance is required for aVA loan.
- No pre-payment penalties are assessed if you pay off your VA loan early.
- Interest rates are, on average, lower than the prevailing mortgage rates.
Other things to know about buying with VA financing
VA does not make direct loans to buyers. You’ll still need to find a good, reputable lender to process and fund your mortgage.
In addition to having an acceptable credit history, you’ll need your Certificate of Eligibility in order to qualify for a VA loan. The COE is free and you can find more information on the documentation needed here.
VA does not guarantee the condition of properties purchased with VA loans. It’s up to you to be an informed and educated buyer (that’s where we come in) and to thoroughly inspect any home you are considering purchasing.
Need help finding the right place to call home? We have agents that are experienced in helping with military relocations and finding properties that will qualify for VA financing. Call us today at 504-327-5303.