What Are the Benefits of a VA Loan?

VA home loans are a little different than traditional financing. The Department of Veterans Affairs guarantees all loans making them less risky for the bank. Therefore, banks are more than willing to allow veterans financing to purchase a home. While there are some restrictions, there are numerous benefits to obtaining a VA home loan.

No Down Payment

VA loans don't require a down payment and are available from most lenders. This makes it easier for people who don't have large amounts of cash available to purchase homes.

No Private Mortgage Insurance

Normally when you don't have a down payment lenders require PMI to protect their risk. Not only do VA loans not require PMI, but regulations prohibit lenders from requesting it.

Approval with Less Than Perfect Credit

With a VA loan, the banks are protected by the government if the loan isn't repaid. While you can still be turned down for a VA loan, they are easier to get and will accept those with less than perfect credit.

Streamlined Refinancing

If you choose to refinance your home, having a VA loan makes it easier. You don't have to go through credit verifications, prove your income, or show proof of any assets.

Lower Closing Costs

While all loans have closing costs, with a VA loan the rate is lower than a traditional loan. You will still have to pay some sort of closing costs, but this will save you a significant amount of money.

No Pentalty for Pre-Payment

Some loans charge a fee for early payoff because the bank isn't receiving interest if you pay your loan off early. You can choose to pay a VA loan off whenever you want without being charged any fees.