Taking out a mortgage is a pricey endeavor. That is why finding the right loan program to finance your home is as important as finding the right property itself.
Today, various loan programs are available to cater to an equally diverse spectra of borrowers. From first-time homebuyers to those who have issues with their credit scores, the mortgage industry has evolved throughout the years to provide solutions to the most common procurement difficulties. Specialty loan programs have been tailored, both by private and public institutions, making homeownership more accessible to many Americans.
The VA loan is one of such programs. Disbursed under the backing of the
United States Veterans Affairs, these loans cater especially to US military servicemen, both on duty and veterans. The VA loan program is perhaps one of the best loan programs today. Let us know some of the reasons why.
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Down Payment Not a Requirement
One of the most common homeownership barriers to the American homebuyer is coming up with the cash for the mortgage down payment. Unless you’ve spent years saving up or are already financially successful, down payment usually pose a hinder for many.
With the VA loan program, the borrower is freed from the requirement and the worry altogether. For a home that costs $200,00, a VA loan with zero down payment could easily mean a savings of $10,000 to $40,000. This is advantageous for borrowers who want to keep as much cash in their wallet, and take advantage of the leverage.
Our lenders can answer your questions about VA loans here.
No Mortgage Insurance
Following conventional loan SOP, if you don’t shell out at least 20 percent of the home price as down payment, you will be required to pay for a private mortgage insurance. With the VA loan however, even if you pay zero for the down payment, you will not be charged with any upfront or recurring fee for private mortgage insurance. The VA shoulders the risk on your behalf.
PMIs cost around 0.5 percent to 1 percent of the entire loan amount annually. For a $200,000 loan, that would be around $2,000 on every year you’re paying your mortgage. Compounded, that is a savings of around $30,000 for a 15-year fixed-rate mortgage.
Together, the VA loan could save the eligible borrower an amount of $50,000 to $70,000 for the stated home price alone. That’s precious help to get started with owning a home. And these are not the only perks offered by the VA loan. Lenders are also not required to verify income sources and assets, and no credit check is strictly needed.
But that doesn’t mean you can be entirely lax with your preparation. Some lenders don’t follow these rules to the book. To secure an approval, it is still imperative to see to it that you’re in your best financial shape when you apply. After all, you will be the one paying the
debt, and a default is entirely on the detriment of your credit score.
With the added advantage of today’s low-interest rates, getting a VA loan makes all the sense, especially if you qualify for the option.
So get matched with a lender today!