Thank you for serving our country!
One of the ways we can say “Thank You” to our Veterans, military personnel and other groups is through VA loans. VA loans have many benefits for Veterans and military personnel compared to an FHA or Conventional loan.
Backed by the U.S. Department of Veterans Affairs, VA loans are designed to help active-duty military personnel, veterans, reservists, and certain other groups become homeowners at an affordable cost. VA loans have 8 main benefits, including.
1. No down payment
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, 20 percent or more of the home’s purchase price upfront in cash, with a VA loan, you can finance up to 100 percent of the purchase price. The VA loan is a true no-money-down opportunity.
2. No monthly mortgage insurance
Typically, you are required to pay for monthly mortgage insurance if you make a down payment less than 20 percent. This insurance, which is known as private mortgage insurance (PMI) for a conventional loan and a mortgage insurance premium (MIP) for an FHA loan, protects the lender in the event that you default on your loan.
VA loans require neither a down payment nor monthlyprivate mortgage insurance. That makes this VA-backed mortgage very affordable upfront and over time.
3. No pre-payment penalty
A VA loan doesn’t restrict your right to sell your home if you decide you no longer want to own it. There’s no pre-payment penalty or early-exit fee no matter when you decide to sell your home.
Furthermore, there are no restrictions regarding a refinance of your VA loan. You can refinance your existing VA loan into another VA loan via the agency’s Interest Rate Reduction Refinance Loan (IRRRL) program or switch into a non-VA loan at any time.
4. Many varieties
A VA loan can be used to buy a house, condo, new-construction home, manufactured home, multi-family home, duplex or other types of properties.
Or, it can be used to refinance your existing mortgage, make repairs or improvements to your home, or make your home more energy efficient. The choices are yours. A First Centennial Mortgage loan officer can help you decide.
5. Easy to qualify
Like all mortgage types, VA loans require specific documentation, an acceptable credit history and sufficient income to make your monthly payments. But, as compared to other loan programs, VA loan guidelines tend to be more flexible. This is made possible because of the VA loan guaranty.
The Department of Veterans Affairs genuinely wants to make it easier for you to buy a home or refinance your current home.
6. Low closing costs
At First Centennial Mortgage, we waive our standard processing fee as a thank you to our veterans.
In addition, the VA limits the closing costs lenders can charge on VA loans. This is another way that a VA loan can be more affordable than other types of loans. Money saved can be used for furniture, moving costs, home improvements or anything else. This is a huge benefit.
7. 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 factors. Funding fees don’t need to be paid as cash, though. The VA allows it to be financed with the loan, so nothing is due at closing.
And, not all VA borrowers will pay it. VA funding fees are typically waived for veterans who receive VA disability compensation and for unmarried surviving spouses of veterans who died, or as a result of a service-connected disability.
8. VA loans are assumable
Most VA loans are “assumable,” which means you can transfer your VA loan to a future home buyer if that person is also VA-eligible.
Assumable loans can be a huge benefit when you sell your home — especially in a rising mortgage rate environment. If your home loan has today’s low rate and market rates rise in the future, the assumption features of your VA loan become even more valuable.
Thank you again for your service! Please contact us to learn more about VA home loans.