10 BENEFITS of a VA LOAN
1. EASY TO QUALIFY
VA loan guidelines tend to be more flexible than other loan programs. This is made possible because of the VA loan guaranty.
2. NO DOWNPAYMENT
Rather than paying any downpayment percent of the home’s purchase price upfront in cash, with a VA loan, 100 percent of the purchase price can be financed in the loan.
3. NO MORTGAGE INSURANCE
Typically, lenders require mortgage insurance if the downpayment is less than 20 percent. This insurance protects the lender in the event the borrower defaults on the loan. A VA loan does not require mortgage insurance.
4. U.S. GOVERNMENT GUARANTEE
The federal government guarantees that a portion of the loan will be repaid to the lender even if the borrower is unable to make monthly payments for whatever reason. This guarantee encourages and enables lenders to offer VA loans with exceptionally attractive terms to borrowers that want them.
5. COMPETITIVE INTEREST RATES
VA loans are neither originated nor funded by the VA and the rates are not set by the VA. VA loans are offered by U.S. banks, savings-and-loans institutions, credit unions and mortgage lenders—each of which sets its own VA loan rates and fees.
6. LOAN OPTIONS
A VA loan can have a fixed or an adjustable rate. It can be used to buy a house, condo, new-built home, manufactured home, duplex or other types of properties. Or it can be used to refinance an existing mortgage, make repairs or improvements to the home or make the home more energy efficient.
7. NO PREPAYMENT PENALTY
There’s no prepayment penalty or early-exit fee when the borrower decides to sell the home. It can be refinanced into another VA loan via the agency’s Interest Rate Reduction Refinance Loan (IRRRL) program or switched into a non-VA loan at any time.
8. LOWER CLOSING COSTS
The VA limits the closing costs lenders can charge to VA loan applicants. And closing costs can be paid for by the seller.
9. FUNDING FEE FLEXIBILITY
VA loans require a “funding fee”, an upfront cost based on loan amount, type of eligible service, down payment size plus other factors. Funding fees don’t need to be paid as cash. They can be financed, so nothing is due at closing. VA funding fees are normally waived for veterans who receive VA disability compensation and for unmarried surviving spouses of veterans who died in service or as a result of a service-connected disability.
10. ASSUMABLE FINANCING
Most VA loans are “assumable,” which means the VA loan can be transferred to a future homebuyer if that person is also VA-eligible. Assumable loans can be a huge benefit when selling the home—especially in a rising mortgage rate environment.
Premier Nationwide Lending is proud to be a VA loan participant lender!
Call us today and let’s get you started on buying your dream home!