Benefits Of VA Mortgage Loan
A VA mortgage loan is a type of loan that is supported by the Department of Veterans Affairs (VA) for those who are serving in the US military as well as those who have served. While the Department of Veterans Affairs does not lend personnel’s money for VA loans, it supports loans made by private lenders, such as banks, loan or mortgage companies to active military personnel and spouses of members who are eligible.
VA mortgage loans remain one of the few mortgage options for borrowers who want a no money down payment. It is available for millions of veterans and active military personnel, VA loans are somewhat easier to qualify for than conventional mortgages. Below, we will check out some of the many benefits of VA mortgage loans.
Restricts Closing Costs
All mortgages usually have an attached fees and closing costs. However, a VA mortgage loan limits what veterans can be charged when it comes to closing costs. Certain expenses and costs can also be covered by other participants in the transaction.
VA lenders can ask the seller to pay all closing costs, depending on the loan amount. There is no guarantee that the seller will accept the request, but veterans can certainly request for it during the negotiation process.
It Is Easier To Qualify For A VA Loan
As with all types of mortgage loans, VA loans require certain documentation, appropriate credit history (580 credit score for VA loans) and sufficient income to make their monthly payments. However, compared to other credit programs, the guidelines of VA loans tend to be more flexible.
No Money Down Payment Is Made For A VA Loan
Most mortgage loan programs require that you make at least a small amount of payment to buy a house. But a VA mortgage loan does not require this.
Instead of paying 15, 20, 30 percent of the purchase price of the house with a cash advance, VA loans can finance up to 100 percent of the purchase price.
Eligibility And Requirement For VA Mortgage Loan
- VA loans are made for Americans who have served in the military. It also includes cadets in the United States Army, Air Force, Coast Guard Academy and midshipmen from the US Naval Academy.
- Before applying for a VA loan, you must obtain a certificate of eligibility. You will need to fill out an application to get this certificate.
- Eligibility depends on the length and type of service you attended. VA loans are available to members of any branch of the armed forces of the United States.
- Active duty personnel’s are eligible after 90 days of service in war and 181 days without war.
- Members of the National Guard and reserves must complete six years of service before they can be accepted.
- Widows of veterans who died in battles are also eligible.
- Applicants must have a good credit score such as 580 credit score for VA mortgage loans and earn enough to make monthly payments. Also, debt and income ratio requirements should not be too high. Lenders want the ratio to be less than the maximum value that is allowed.
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