We all know that being a first-time homebuyer is a challenging process. Staying informed of your available loan options is half the battle. You may qualify for a VA Home Loan if you are a veteran or active duty service member. Learn why a VA Home Loan may be the best loan option for you.
What exactly is a VA Home Loan?
A VA Home Loan is a loan provided by approved private lenders and partially guaranteed by the U.S. Department of Veteran Affairs. You must either be on active duty, a veteran, or a surviving spouse of service personnel to qualify. Furthermore, VA Home Loans have no set minimum credit score to qualify. However, some private lenders will require you to have minimum credit scores of 580+. VA loans have lower qualification standards since the U.S. Department of Veteran Affairs backs these loans.
So, What Are The Perks?
You may want to consider a VA Loan for the low-interest rates compared to an FHA loan. You may be pleased to know that VA Home Loans have no down payment requirement, as saving enough for a down payment can be a barrier for many first-time home buyers. Additionally, VA loans do not require Private Mortgage Insurance (PMI), which can be hundreds of dollars per month with traditional loans. The sky is the limit for VA Home Loans, unlike other loans that limit your borrow amount and keep your dream home out of reach. VA Home Loans come penalty-free, meaning you can refinance in the future without any penalty. You can use a mortgage calculator to estimate your PMI savings compared to traditional loans.
What’s The Catch?
You may think this sounds too good to be true. Well, VA Home Loans are not without their drawbacks. For one, you cannot purchase a second home or investment property with a VA Home Loan. You may want to consider a conventional home loan if you are interested in buying a second home or investment property. Another downside of VA Home Loans is that they require a funding fee of 2.3% that will be added to your total loan. Suppose you are in the market for an existing home. In that case, you will not be allowed to waive contingencies when submitting an offer on a home, a negotiating tactic becoming increasingly popular in competitive housing markets.
Speak with a VA Home Loan Expert
A VA Home Loan is not for everyone. However, this loan can offer veterans more perks when compared to FHA Home Loans. Granville Home Loans is a VA-approved lender, and Loan Officers are here to help. Granville Homes has over 40 years of providing excellent service and Granville Home Loans makes the home buying process easier than ever. Contact one of our experienced Home Loans Officers to see if you qualify for a VA Home Loan today.