In 1944. after the introduction of the VA Loan Guaranty Program, over 22 million veterans and military members have purchased their own dream home. This program, with the Department of Veterans Affairs, offers a VA home loan scheme and allows traditional financial institutions such as mortgage companies, banks and credit unions throughout the country to offer loans with special benefits for the military members and veterans. Some of the major advantages of this program are low-interest rates, $0 down payment and no PMI.
Other reasons that make VA home loans excellent for veterans to buy a dream home can be discussed as under:
Save down payments
VA Mortgage Loans help to save money for service members and veterans. With the power of federal government, they can get protection for their down payment. In fact, VA home loans need no down payment unless a buyer chooses to pay one.
Save money through closing costs
A veteran can also save money as government limits the amount of closing costs as well as all the other nit-picking costs that a lender can charge from a borrower. Up-front processing fees or any other consideration fees can also not be charged. In some cases, if fees are exacted from the veteran or service member, the amount is lower than non-VA home loans.
Low monthly payments
A monthly mortgage payment for the VA home loan rates in Florida is considerably less in comparison to standard home loans. There is also need not of a mortgage insurance as government underwrites the loan. There are also restrictions on the interest rates liable to be charged. With low-interest rates, monthly payments also get lower.
A pre-payment penalty is another fee that can cause troubles for the standard home buyers. In case a veteran manages to acquire money to pay off a loan before its maturity, he/she will not be penalized for making good on a loan.
Borrowers can have a loan in spite of bad credit
In case, veterans or service members have their bill obligations for a previous year to 18 months, they still can have the approval of a VA home loan. However, due to credit ratings, interest rates will remain reasonable without any adjustment.
Some other advantages of a VA loan
In case, a service member or veteran opt to sell a home, the mortgage can be assumable by the buyer. Such home’s marketability gets higher and it becomes easy for the veteran to sell it. Appraisers for VA home loans are picked at random basis instead of deciding by the lending institution. In such a situation, appraised values can be skewed in favor of a lender.
Conclusion: In short, a service member or veteran enjoys many benefits while buying a home through VA Loan. These advantages are rendered as the reward for their services which is difficult to find in any other loan scheme.