Even the savviest veterans may not know all the advantages to a VA purchase loan. There are a lot of benefits to a VA home loan: some of them may surprise you!
What are the financial advantages of a VA home loan?
First, you don’t need a down payment. You can finance up to 100% of your purchase price with a VA purchase loan.
Other financial advantages include:
- Flexible credit standards — you don’t need perfect credit
- No mortgage insurance premiums
- No prepayment penalties
- Fixed and adjustable rate mortgages
- Your VA mortgage is assumable
For most veterans, the biggest benefit to a VA home loan is no down payment required. You can finance 100% of your VA home purchase and also get competitive VA home loan interest rates. VA mortgage rates are generally lower than other types of loans.
More great news about VA home loans: as of January 2020, the VA is removing county loan limit restrictions. After January 2020 if you meet eligibility criteria and have enough income to pay the mortgage, you could get a $2M (yes $2 million) VA loan. With 30 year VA mortgage rates starting at 3.375% and 15 year VA mortgage rates starting at 3.250%, you could easily buy a home in Los Angeles, Ventura, Orange County, or anywhere else in the state of California that may be considered a high cost area.
VA home loans aren’t offered by the U.S. government, but they are guaranteed. The VA loan guarantee is one reason lenders are willing to offer excellent terms like no money down, low VA mortgage rates, and refinancing opportunities that can lower your monthly mortgage payment.
There are a lot of other benefits to VA home mortgage loans. Funding fees can be waived for disabled vets and their surviving spouses, and if they’re not waived, you can finance the fees along with the loan for a true no down payment option. If a veteran is receiving any sort of disability pay find out if you are eligible for having the funding fee waived. You only need to have a 10% disability to have this waived. Usually that means if you are getting at least $130 per month in disability you usually qualify for the funding fee waiver. You aren’t limited to a single family residence with a VA mortgage loan either. You can buy a duplex, triplex, or four-plex as long as you’re going to live in one of the units.
VA home loans are available for active members of the service, veterans, and their surviving spouses who haven’t remarried. Once you’re eligible for a VA loan, your eligibility won’t expire. VA home loans come with dozens of benefits and if you’re a Vet or surviving spouse, they can help you buy the home you want.