what are the benefits of a va home loan

Is a VA home loan a good idea?

VA loans offer better terms and interest rates than most other home loans. 100% financing — typically, there is no down payment required for a VA loan, as long as the purchase sales price of the home does not exceed the appraised value of the home.

Why do sellers not like VA loans?

Why don't sellers like VA loans? Many sellers — and their real estate agents — don't like VA loans because they believe these mortgages make it harder to close or more expensive for the seller.

What are the negatives of a VA loan?

What are the Disadvantages of a VA Loan?You May Have Less Equity in Your Home. ... VA Loans Cannot be Used for Vacation or Rental Properties. ... Seller Resistance to VA Financing. ... The Funding Fee is Higher for Subsequent Use. ... Not All Lenders Offer – or Understand – VA Loans.

What are the advantages and disadvantages of VA?

VA loan benefits and drawbacksProsConsNo down payment requiredMust be eligible based on military serviceNo loan limitsTougher appraisal requirementsNo income restrictionsLonger wait in between refinancing than conventional loansNo mortgage insurance requiredVA funding fees up to 3.6% of the loan amount2 more rows•Dec 21, 2021

Are there closing costs on a VA loan?

The exact amount that you'll pay in VA loan closing costs will vary based on the home you choose and the details of your loan. However, you should expect to find closing costs 3% – 5% of the total value of the loan.

How much money down do you need for a VA loan?

No down payment, no mortgage insurance These are perhaps the biggest advantages to a VA loan. You don't need a down payment. None whatsoever. Most mortgage programs, such as FHA and conventional loans, require at least 3.5 percent to five percent down.

What is VA funding fee 2021?

2021 VA Funding Fees For Purchase And Construction Loans For cash-out or regular mortgage refinance, first-time borrowers will pay a 2.3% funding fee, while subsequent borrowers pay 3.6%.

Can you pay off VA loan early?

No prepayment penalty VA loans have no prepayment penalties. You can pay off your mortgage early or make additional payments without fear of being penalized financially. Other loan products on the market, such as conventional and FHA, may have prepayment penalties, which can prevent borrowers from saving money.

Do you pay mortgage insurance on a VA loan?

VA loans also don't require private mortgage insurance (PMI), but you will pay a VA funding fee when you close, which will be a percentage of the loan's total value. That fee helps keep the program running for future borrowers.

The VA Loan: Better Than FHA and Conventional Loans?

There is a “right program” for every mortgage borrower, but for many, the VA loan stands apart for its combination of low rates, aggressive underwr...

No Down Payment on A VA Loan

Most home loan programs require you to make at least a small down payment to buy a home. The VA home loan is an exception.Rather than paying 5, 10,...

No Mortgage Insurance For VA Loans

Typically, lenders require you to pay for mortgage insurance if you make a down payment that’s less than 20 percent. This insurance, which is known...

VA Loans Have A Government Guarantee

There’s a reason why the VA loan comes with such favorable terms. The federal government guarantees that a portion of the loan will be repaid to th...

Your Ability to Shop and Compare VA Loans

VA loans are neither originated nor funded by the VA. Furthermore, mortgage rates for VA loans aren’t set by the VA itself. Instead, VA loans are o...

VA Loans Don’T Allow A Prepayment Penalty

A VA loan won’t restrict your right to sell your home if you decide you no longer want to own it. There’s no prepayment penalty or early-exit fee n...

They Come in Many Varieties

A VA loan can have a fixed rate or an adjustable rate. It can be used to buy a house, condo, new-built home, manufactured home, duplex or other typ...

It’S Easier to Qualify For VA Loans

Like all mortgage types, VA loans require specific documentation, an acceptable credit history and sufficient income to make your monthly payments....

VA Loan Closing Costs Are Lower

The VA limits the closing costs lenders can charge to VA loan applicants. This is another way that a VA loan can be more affordable than other type...

The VA Offers Funding Fee Flexibility

VA loans require a “funding fee”, an upfront cost based on your loan amount, your type of eligible service, your down payment size plus other facto...

When will the VA stop jumbo loans?

Starting in 2020 , the VA announced the removal of the VA loan limit for VA-backed mortgages. This allows VA borrowers more buying power, including the option to apply for a so-called Jumbo Loan, which tops the Fannie/Freddie conforming limit for that housing market.

Can you get an exemption from VA disability?

Borrowers currently receiving or eligible to receive VA service-related disability compensation may be eligible for an exemption from the funding fee.

Do VA mortgages require a down payment?

VA mortgages demand no down payment in most cases. When it comes to home loans, Zero down is a huge advantage, mainly for lower-ranking junior enlisted personnel.

What you stand to gain with a VA Home Loan

As a veteran or a military service member, a loan by the VA is one of the best options at your disposal to get your home and thus stabilize your future.

Full cash-out refinancing available

The VA also allows you to get exactly 100% cash-out refinance, and, unlike other loans in which this comes with a hefty fee, you need not pay anything extra for a VA loan. Lenders, however, may have their own limits that may be close to 90%, if not lower.

What Are VA Loans?

Across the nation, brave servicemen and servicewomen have enlisted in the military and taken on a variety of high-pressure positions to protect our country. As we know, these individuals can take advantage of several benefits at their disposal, such as pension programs, low-cost medical care, education programs, and more.

Eligibility and Qualification

When considering a VA loan, one of the first questions you need to ask yourself is am I eligible?

What Are the Benefits of a VA Loan?

If you’re eligible for a VA Loan, these benefits are going to come as a pleasant surprise to you. Many who already use VA Loans are not fully aware of what advantages are available to them, so we hope that the following offers some clarity around how beneficial VA Loans are:

VA Loans: Fact vs. Fiction

We want to make sure that your home buying experience not only leads you to your dream home but educates you along every step of the process. Being educated on the process helps debunk common myths in the mortgage industry that are widely misinformed.

VA Loans Vs. Other Loan Types

Now that you know more about VA Loans, how do they compare to other loan types? VA loans are frequently compared to FHA loans, as they are also government-backed.

Success Story: Using VA Benefits More Than Once

John Martin, a mortgage banker who specializes in VA loans being a veteran himself, has worked with several borrowers who leveraged the several benefits of VA loans. According to John, it became a huge advantage in reaching their financial goals.

Thank You for Your Service!

To summarize, VA loans are one of the most valuable loans on the market, based on the tremendous benefits that push eligible individuals toward their dream of homeownership.

How much is the VA loan entitlement?

Typically, the basic VA entitlement is 25% for loans up to $144,000, or $36,000 (however, the amount awarded is based on a variety of factors, and may be higher). Bonus entitlement covers loans above $144,000 (up to the FHFA conforming loan limit of $548,250, for most areas, and up to $822,375 in high-cost areas), making it possible for eligible active duty service members, veterans, and surviving spouses to purchase higher-priced homes. 6

Why did the VA start lending?

The VA loan was created in 1944 to reward veterans returning from World War II for their service, by making it easier for them to get into a home with an affordable mortgage. The U.S. Department of Veterans Affairs (VA) doesn’t loan money; mortgages are provided by private lenders. However, VA guarantees a portion of the loan that it will cover if you default, also called entitlement. This may prompt lenders to offer more favorable terms for veterans.

How many VA loans were granted in 2021?

It remains one of the most popular mortgage programs today. In the third fiscal quarter of 2021, for example, over 335,000 VA loans were granted for new home purchases. 1 There's a reason for the program’s popularity, and it has to do with some smokin' VA home loan benefits.

How much can a seller pay on a loan?

If you are able to negotiate to have the seller pay these optional fees, they won't be able to pay more than 4% of the loan amount. 5

Does VA loan have PMI?

With VA loans, there's no monthly PMI payment, even if you put zero down. This eliminates a huge cost and makes your monthly payments more affordable right from the start.

Does VA require PMI?

VA loans require no money down, no PMI, and offer better rates than conventional loans.

Do you have to pay closing costs on a VA loan?

If you get a VA loan, the seller will be required to pay certain closing costs, including the commission for the buyer's and seller's agent and a termite report. It's optional for the seller to pay other fees too, such as the VA funding fee for your loan or the appraisal fee.

What is VA housing assistance?

VA housing assistance. VA housing assistance can help Veterans, service members, and their surviving spouses to buy a home or refinance a loan. We also offer benefits and services to help you build, improve, or keep your current home.

How to contact the VA about homelessness?

Call the National Call Center for Homeless Veterans at ( 877-424-3838) for help 24 hours a day, 7 days a week. You’ll talk privately with a trained VA counselor for free.

When was the last time the National Call Center for Homeless Veterans was updated?

Last updated: June 23, 2020. National Call Center for Homeless Veterans. Find out how we can help you or a Veteran you care about connect with VA and local resources 24 hours a day, 7 days a week.

What to do if you disagree with a home loan decision?

If you disagree with a decision on your application for home loan benefits, you can request a decision review. You can also manage any review requests or appeals you already filed.

What is the VA loan number?

If you have any questions about your eligibility for a VA home loan, please call your VA regional loan center at 877-827-3702. We’re here Monday through Friday, 8:00 a.m. to 6:00 p.m. ET.

Can a spouse of a veteran get a COE?

You may be able to get a COE if you’re the surviving spouse of a Veteran or the spouse of a Veteran who's missing in action or being held as a prisoner of war (POW). Find out how to apply for a COE as a surviving spouse.