VA Home Loan
Why should you consider a conventional loan?
As a veteran or a family member of the United States military, you may be eligible for the United States Government VA home loans. Although this mortgage is issued by a private lending institution, the U.S Department of Veterans Affairs backs these mortgages to provide financial support and stability following active duty or retirement. As such, they have helped over 22 million veterans since its inception.
Characteristics of a VA home loan
The VA home loan is the best option for veterans or active service members looking to own a home. One of its most prominent features is that there are no down payment requirements and private mortgage insurance can be avoided in many cases too! Since its inception, this program has had an important role in helping people buy homes where they could not otherwise afford them by guaranteeing up to 100% financing. The fact that it is backed by the federal government means that the VA will reimburse the lender for any losses which may be as a result of a default.
Requirements for a VA home loan
Those who qualify for a VA loan are active service members or veterans, and the loan can extend to a surviving spouse if there are clean financial records. Children of a veteran do not qualify for this type of homeownership loan. You are ineligible if you have defaulted on a home loan in the past year or filed for bankruptcy for the last 24 months. The qualification of a veteran is a person who has served for at least three months or more days in wartime or 181 days or more during peacetime. For a person who was discharged with a service-related disability, these requirements are waived. For those in the Reserves and National Guard, the period of service is six years. For the surviving spouse, they should not have remarried.
Benefits of a VA home loan:
- 100% financing for qualified veterans - No down payment
- No private mortgage insurance
- Even more competitive interest rates
- Government guarantee
- No prepayment penalties
- Lower closing costs