VA Home Loans-What Are the Benefits?

Military service is often a lifelong commitment for both military personnel and their families, so the least Dad’s government can do is help them find affordable housing. 

Because Veterans Day got me thinking about the military, today I’m going to talk about VA loans that started with the 1944 GI Bill. 

To qualify for a VA loan, potential borrowers must meet minimum active duty requirements and agree to live in the home they purchased. 

In addition, you need to get a certificate of eligibility for residency, find a loan because you can’t get a direct loan from the government, and find a house (which can be difficult in the current situation). 

However, there are problems with VA mortgage loans:

• No deposit is required. Employees and veterans can put the money down if they want, but unlike a regular mortgage, the Veterans Association will repay the lender if the home is in foreclosure. This means you can get a loan without a down payment. However, individual lenders may have different rules.
• Low-interest rates. The CFPB has an interest rate estimator that allows potential borrowers to determine what rate a private lender is willing to offer based on their credit report, circumstances, home price, and down payment rate (requires selecting “VA” for Loan Type drop-down menu).
• Limitation of closing costs. It will require the seller to pay at least a portion of the closing costs. Buyers can also negotiate with sellers to pay other closing costs, such as VA financing fees.
• No personal mortgage insurance (PMI). Unlike other mortgage products, VA loans don’t require a PMI, even if you’re down 20% or less.
• VA loans are reusable. However, getting a new home loan can make the process more difficult or expensive.

Current estimates suggest there are more than 13,000 uninsured veterans in the United States. 

While more needs to be done to help all veterans find affordable housing, VA loan programs can be a significant help to eligible military families.