As a veteran or active service member, you have access to exclusive benefits from the U.S. Department of Veterans Affairs (VA) that can help you buy a home at a more affordable cost. If you’re eligible, here are seven reasons you should take advantage of a VA home loan:
No down payment. VA loans can be 100% financed, meaning you don't have to save up for a down payment. Keep in mind, paying a small amount toward a down payment will save you money in the long run.
Affordable closing costs. With traditional loan programs, you could pay anywhere from 2% to 5% of the home's purchase price on closing costs. With a VA loan, there is a limit on the amount you can be charged for closing costs, which provides an added money-saving benefit to the borrower.
No mortgage insurance. If you put less than 20% down on a traditional mortgage, you'll typically be required to pay mortgage insurance, which gets added to your monthly mortgage payment. VA loans save you money by not requiring mortgage insurance.
Competitive rates. VA loans are backed by the government, which provides a guarantee to the lender in case you default on your loan. Because of this guarantee, lenders are able to offer better loan terms and interest rates, helping you to save money.
Reusable benefits. Already took out a VA home loan? Your VA benefits are reusable, so you can use your benefit again and again, making affordable homeownership attainable over the course of your life.
No prepayment penalty. Many loan programs charge the borrower a penalty for paying off their loan early. This may happen if the homeowner decides to sell or refinances their existing property. Fortunately, VA loans don't charge this type of fee, which gives you more freedom and flexibility.
VA loans are assumable. An assumable loan means your VA loan can be transferred to a future buyer, as long as the buyer is also eligible for a VA loan. If the rate on your loan is more favorable than current market rates when it comes time to sell, it could be a major selling point and help you close the deal faster.
Make the most of your benefits today
While VA loans offer flexibility and affordability, it's important to be aware of the housing market around you. With current home prices and interest rates on the rise, the longer you wait to buy a home, the more money it may cost you — even with a VA loan. That's why it's important not to wait. If you're wanting to purchase a home this year, get the most out of your VA benefits by buying now. Visit benefits.va.gov to check your eligibility.