The VA Home loan is specifically designed for eligible veterans and service members. There are millions of veteras eligible to explore their VA home loan benefits sadly only a very small percentage actually take advantage of this outstanding benefit.
VA Loan Benefits, Helping Veterans Become Homeowners
Are you a veteran thinking about purchasing a new home? Are you wondering which loan would be best for you and your family? That can sometimes be the most difficult part, but for Veterans, it’s easy. In 1944, the Department of Veterans Affairs passed the GI Bill specifically for active duty military service members and Veterans. The GI Bill would make it easier for Veterans, who protect the American Dream, to become homeowners and enjoy the American Dream of Homeownership. Since the time the GI Bill was passed the VA has backed and issued VA loan guarantees on millions of VA home loans. Keep in mind that the Department of Veterans Affairs does not issue, lend, or approve home loans. However, the VA does guarantee a portion of the home loan for the lending institution in case you were to ever default on your home loan.
Why the VA Loan?
So, the question remains, why a VA loan? What makes the VA home loan better than a Conventional or FHA home loan. Below we will detail the reasons a VA home loan is best for all active military and Veterans, but, if you ask me or thousands of other Veterans, they will tell you the #1 reason to use your VA eligibility is ZERO money down!
Why a VA loan over other loan options?
$0 Money down (100% Financing)
No Monthly Mortgage Insurance (saves you money) Historically Lower interest rates (Allows you to qualify for more home) Expanded Credit Qualifying Guidelines (You don’t have to be perfect)
One of the most commonly used loans to purchase a home is an FHA loan. Based on national housing statistics the average loan amount in the United States is roughly $165,000. When using an FHA loan to buy your home you will be required to have a minimum of 3.5% available for the down payment. Based on these numbers that is over $5,775 out of your pocket! That means you have to save that money, then go pull it out of your bank and hand it over when you close. Not only will you have to put all that money down but your thanks for doing so is, a monthly mortgage insurance payment for a minimum of 5 years! This starts to take a little shine off the joys of home ownership doesn’t it? If you think that’s bad, imagine if you did a Conventional loan. In most cases you will put a minimum of 5% down and pay monthly mortgage insurance until your Loan to Value, which is the value of your property in comparison to the balance of your loan, is below 80%.
There are many other benefits to the VA loan such as, higher debt to income ratios, lower credit score qualifying, added benefits for Veterans with VA disability, and typically lower interest rates. Honestly, if you can buy your home and take zero dollars out of your pocket why wouldn’t you. If you are a Veteran and have the desire to become a homeowner do not wait! Take advantage of the benefits that you and millions of other Patriots have fought hard for. You’re a Veteran, you don’t set on the sidelines, you take action.
To put this into perspective, think about this; The national average rental cost for a 2-bedroom apartment in 2018 is $1,180. You are required to put first, last and security down on most leases which is roughly $3,500, just to move in! So, to rent the 2-bedroom apartment with a bunch of neighbors you don’t know but you can sure hear, paint on the walls that you can’t change, no yard, no garage, no tax advantages and no equity, you will pay almost $3,500 out of your pocket, from your bank just to climb 3 flights of stairs to get to your recliner every night. Crazy right?! Now let’s take that same payment of $1,180 and use your VA Benefits, you get to know and like your neighbors (except the weird guy at the end of the street) you have a yard that you can take pride in, a garage you can park your cars in (and hide from the weird guy down the street) and an American Flag you can hang out front. Not to mention the equity you’re building and the tax advantages you qualify for as a home owner.