Advantages – VA Home Loans over Conventional Home Loans
Benefits of a VA Home Loan Veterans can benefit by using a VA home loan instead of a conventional mortgage loan. No matter if you are a first time buyer or looking to refinance your existing loan.
- VA Loan – No down payment required in almost all cases
- Conventional loan – requires at least 10% down
- VA loan – Mortgage insurance is not required
- Conventional loan – requires mortgage insurance if you finance more than 80%
- VA Loan – Credit qualification requirements are easier than conventional loans
- Conventional loan – Good FICO score is critical in qualifying
- VA Loan – If you prepay your mortgage there are no penalties
- Conventional loan – have a penalty if you pay off the loan early.
Other Benefits Of VA Loans
VA Loan money has other uses – You are allowed to use the VA loan for other home related purchases such as buying a condominium or townhouse.
You may also use the VA loan funds to build a home or make energy efficient home improvements, or even refinance your home
VA Loan – No Down Payment
No Out Of Pocket Cash – If your loan amount is under $417,000, there is no down payment on a VA loan so you don’t need to put down any out of pocket cash to purchase your home. For example even for an FHA Loan, which only requires a 3% down payment that would mean coughing up $3000 on a loan of $100,000.
The VA also will help you avoid closing costs – the seller is allowed to pay up to 6% of the closing costs and pre-paid expenses toward your loan.