When it comes to some of the lesser known and undervalued benefits that veterans and current service members of the US military, it might be fair to say that the VA loans program is one of the most significant and most potentially life-changing. If you are currently unsure as to whether you would be eligible for VA loan assistance, then all you need to do is head over to WhatsMyPayment to use the handy and simple VA loan calculator. Simply input the relevant information and you will soon find out exactly where you stand in terms of getting help for buying a house.
To give you a better understanding of just how massive the impact of a VA loan can be, here are some of the many ways in which getting a VA loan can help veterans to save money.
No Down Payments Are Required
Probably the single biggest benefit of a VA loan is the fact that it offers 100% financing, which means that no down payment is required in order to qualify for the assistance. Compared to a more traditional mortgage which requires at least a minimum of 3% upfront, this is a big boost to veterans who have not saved money for a deposit.
As a concept, 3% might not seem like much, but for a property of around $350,000, that equates to having to have funds of $10,500. Without this requirement, a VA loan gives all veterans a much better choice of being able to afford the home of their dreams.
There Are Limited Closing Costs
With an effort to make sure that VA loans stay as affordable for qualifiers as possible, the VA limits a lot of borrower fees that can be much higher elsewhere. For example, a lender can only charge a flat 1% origination fee. This, along with a handful of other limits, helps to keep the closing costs of any property transaction to a minimum. In addition to this, it is always worth enquiring about how many of the various closing costs the seller is willing to pay for, in order to get the property transaction completed in the timeliest manner possible.
There Are No Private Mortgage Insurance Requirements
Another perk of VA loans is that there is no requirement for private mortgage insurance. In other situations, PMI is required when a borrower is not able to put a 20% or more down payment on the purchase, as this helps to protect the lender if the loan ultimately ends up defaulting. In the VA system, this simply isn’t a part of the process, and therefore Vet home buyers are able to save a lot of money by effectively not being forced to pay for an extra insurance premium that they don’t necessarily need or will not necessarily benefit from.
There Is No Home Loan Limit
If you are an eligible borrower with full entitlement credentials, then there will be no loan limit set on your by the VA. The only limit you will have to contend with is the limit that might be set by the lender that you choose. Depending on the practices of the specific lender in question, this loan limit will tend to vary, but something that will give you clarity is the fact the limit will never have been imposed as a result of the VA loan system.
Super Competitive Interest Rates
Another factor that puts VA loans above any other type of home loan is the fact they are able to boast such competitive interest rates. The generous and secure backing that the VA program receives helps to reduce a lot of the risk in the lending that they do, which in turn enables them to offer much lower rates of interest for the home buyers to have to add to their existing costs. Simply put, the less you have to spend on interest payments each month, the more you will have either to save in your account, or to spend elsewhere on other elements of your new VA secured home.