The VA had a record year in 2020, approving more than 1.2 million VA home mortgage loans. It’s the most, by far, the VA has approved in a year’s time since the program’s inception in 1944.
These government-backed loans make homeownership more accessible to military personnel and veterans.
Live in Starkville and considering a VA loan for yourself? Learn more about these ten benefits that a VA loan could offer you.
No Down Payment
Down payment requirements for FHA or Conventional loans are typically between 3.5% and 20%. VA loans do not require down payments, making homeownership more accessible for military personnel and veterans who don’t have the cash flow for a large down payment.
No Private Mortgage Insurance
Most mortgage lenders and loan types require a 20% down payment to avoid private mortgage insurance (PMI). This requirement is waived with VA loans, which helps with lower monthly payments and overall cost over the life of the loan.
Competitive Interest Rates
A loan’s risk to the lender determines the interest rates they offer. VA loans lower the lender’s risk in lending to you, so they often offer lower rates for VA loans.
More Relaxed Credit Requirements
Because they are guaranteed by the government, VA allows for borrowers with lower credit scores to apply and still utilize their VA eligibility, even if they have dealt with difficult times in the past. Lenders will still consider your credit history when determining interest rates, so any credit repair you can do before applying will help with your interest rates.
Low or No Funding Fees
A VA home loan will have a one-time funding fee. It is not a set fee, will vary based on the borrower’s circumstances, and is waived for veterans with a service-related disability. Funding fees go directly to the VA to keep the VA loan plan running.
Limits on Fees and Closing Costs
The VA limits how much Starkville lenders can charge in fees and closing costs. This can mean great savings for you, but you cannot roll closing costs into the loan. Therefore, be sure you can cover them yourself or ask for the seller to pay your closing costs.
These limitations don’t limit us, we provide multiple loan options, including VA loans.
There is a misconception that you can only use VA loan benefits once. While, you can only have one VA loan active at a time (for the most part), access to VA loan benefits is a lifetime advantage you can use again and again.
No Prepayment Penalties
Many loans have prepayment penalties to compensate the mortgage lender for lost interest income. VA loans do not have any penalties for prepayment, so you can pay them off as fast as you like.
Help Avoiding Foreclosure
Advocating for veterans and helping them stay in their homes is important to the VA. VA loan holders have access to financial counselors that will help them find solutions during financial hardships.
Qualifying for a VA Home Mortgage in Starkville
With all these advantages, it is in your best interest to find a Starkville mortgage lender that can walk you through qualifying for a VA home mortgage. Use these benefits as a starting point to ask your lender the right questions to find the best loan for you.
Contact us for help getting your VA loan application started today.