Buying a home is likely to be one of the biggest purchases in your lifetime. As an added perk for those who have served in the military, our government offers VA home loans to active service members, veterans, and in some cases, surviving family members. Although understanding the terms of mortgage assistance for veterans can be tricky, there are some key benefits of VA loans.
No Down Payment
With a VA loan, there is usually no down payment requirement on a new purchase loan. This can make it easier for veterans to qualify for a mortgage since they don’t need to worry about providing a hefty payment of about 10-20% of the purchase price at the time of the closing.
Lower Interest Rates
The VA doesn’t directly provide the money to you. In fact, VA loans are offered through private lenders that are guaranteed by the U.S. Department of Veterans Affairs. This guarantee allows the lender to offer lower interest rates to members of the U.S. Armed Forces and their family members.
Veterans may be eligible for mortgage assistance two years after bankruptcy or foreclosure. Most lenders require a minimum credit score of 620 for VA home loans. Since this is lower than many conventional lenders, it’s easier for veterans to qualify.
No Mortgage Insurance Requirement
With conventional and FHA loans, lenders typically require mortgage insurance if you pay less than 20% down. This is not the case with VA home loans, as there is no mortgage insurance requirement.