If you are a member of the United States military -- active duty or retired -- you may be eligible for certain benefits offered through the U.S. Department of Veteran Affairs, or VA. One of the most underutilized veteran benefits is the VA home loan. While the VA does not lend money directly, it guarantees loans made by VA-approved lenders like us, making it easier for veterans to qualify for a mortgage.
Benefits of VA mortgage loans
Some of the benefits associated with VA mortgage loans include:
- No down payment: The ability to buy a home without a down payment is perhaps the greatest benefit associated with VA loans. In most cases, the VA will guarantee loans with no money down, while other conventional loan products require at least a 3% down payment.
- No monthly mortgage insurance: Veteran borrowers buying real estate with less than 20 percent down are not required to pay monthly mortgage insurance premiums. FHA and conventional loans require monthly mortgage insurance when putting less than 20 percent down.
- Lower interest rates: While VA loans do carry other fees, such as the upfront VA funding fee, they typically carry lower interest rates on average than other home loan products. In some cases, the VA funding fee can even be waived.
How to use VA mortgage loans
While the VA guarantees loans against default, it does not guarantee that VA borrowers will be approved. Veterans must still meet minimum lending requirements, such as having proper income and credit.
Here's what you need to qualify for a VA loan:
- Be an active-duty or veteran member of the Army, Navy, Marines, Air Force, or National Guard. (Reservists and surviving spouses may also be eligible.)
- Obtain a Certificate of Eligibility from the VA.
- Meet minimum income and credit standards (these can vary by lender).
For more information on VA mortgage loans, speak to one of our certified VA lending specialists today.
