Benefits of VA Loans
There are various benefits to obtaining a VA mortgage for your home.
Because they are federally guaranteed by the VA, there is much less risk than a traditional mortgage. As such, there are favorable terms offered to buyers that might not receive the same treatment as with traditional mortgages.
Whether it be a new VA purchase or refinancing an existing loan, there are a variety of benefits that can save qualified buyers some serious cash.
VA loans make getting a mortgage easy
If you are a former or active duty service member looking for a low-stress, low-cost mortgage when buying a home or refinancing, Blake Mortgage, is happy to walk you through the VA loan process to get you the best rate and deal. Contact Blake Mortgage today to learn more about this incredible home loan benefit.At Blake Mortgage we are thrilled when we can help military families and veterans qualify for a VA loan because of the many advantages this loan program offers over other mortgage options. It’s our honor to assist those who have bravely served our country save money on their home mortgage.
Here are the top 10 reasons to consider a VA loan for your home purchase, plus 2 refinancing benefits:
- No Down Payment Required
Unlike other borrowing options, in most cases, a VA loan does not require a down payment. Therefore, you can free up your cash to use for other items or move in without saving for a down payment which can be an obstacle for home-ownership for many people.
One factor that sets apart VA purchase loans is the lack of a down payment requirement in most cases. This creates an easier cash flow for other home-buying and moving-related costs that can otherwise pose a barrier for some buyers.
- Lower Interest Rates
VA loans offer consistently lower rates than traditional bank financing loans because the VA home loan program is federally backed by the U.S. Department of Veteran Affairs (VA). VA loans also save the buyer significant money over the life of the loan. This is because these loans usually offer lower rates than a traditional mortgage.
- Easy to Qualify
The good news is to qualify for a VA loan credit and income requirements are much more lenient than conventional loans. You also don’t have to be a first-time buyer to qualify.
It can be significantly easier to qualify for a VA loan than other types of mortgages. The credit and income requirements are much more lenient than what may be required from a bank.
VA loans are available anywhere in the United States and are not limited to first-time buyers. Any qualifying veteran in the US can obtain a VA purchase loan for their home.
- No PMI Payments
Private mortgage insurance, or PMI as it’s commonly known, is required for most types of loans when the buyer does not have 20% down. The PMI protects the lender should one not be able to make a payment on their loan. So not only do you not need a down payment for a loan, you do not need coverage for not having 20% down. Avoiding PMI is a great benefit it can save you anywhere from .5 to 2% of your original loan amount a year.
Under traditional mortgage circ*mstances, homes purchased without at least 20 percent down require private mortgage insurance (PMI). This insurance is designed to protect the lender if the buyer is unable to make payments on the mortgage.
VA loans do not have this requirement. This is yet another example of how VA loans can save the buyer important costs that sometimes go overlooked throughout the process.
- Federally Guaranteed
Because the VA guarantees the loan, lenders are willing to offer more favorable terms than a conventional home loan.
- Communities are Vetted
The Veteran Affairs Department will even go as far as vetting communities before a buyer moves in so that the community is suitable for servicemen and women with disabilities.
- Reduced Closing Costs
A VA loan may also have reduced or no closing costs. Another way to save money through a VA loan is with reduced closing costs. Sometimes these loans might even have no closing costs at all.
- No Prepayment Penalties
Should you choose to make extra payments to reduce your principal balance or pay off your loan early, you will not pay any extra fees or pay a prepayment penalty.
Sometimes, lenders penalize those who wish to pay off their mortgage early. This is because the lender will not receive the same total interest amount in the long run.
VA loans are unique in that they do not carry any prepayment fees or penalties.
- Default Protection
The VA provides insurance to lenders in the case that you cannot make a payment on a loan. Additionally, there are services that may be offered to veterans in danger of defaulting on their loans.
“Funding Fee” Guarantees the VA Loan
Whereas traditional homebuyers might be required to purchase PMI and pay monthly mortgage insurance premiums to cover the risk of not repaying their loans, the VA guarantees the loan through a one-time Funding Fee, and there are no monthly premiums!
Furthermore, the VA provides resources and services to those service members who are in danger of defaulting on their mortgage.
- Available Across the United States
No matter where you live in the U.S., you can access a VA loan by contacting a VA-approved lender.
VA Loans are not just for new homes but can also save money when refinancing.
- Interest Rate Reduction Refinance Loan
An interest rate reduction refinance loan (IRRRL) is an excellent tool for veterans to refinance to lower their monthly mortgage payment with a reduced interest rate. Blake Mortgage can investigate whether we can get you a rate lower than the one you currently have. What is great, is you may not need an appraisal nor credit underwriting to apply for an IRRRL. It’s also possible to refinance without having to bring any money out of pocket to closing.
- Cash-Out Refinance Loan
Need cash from your house? While it’s not possible to get money out from an IRRRL, a VA-backed cash-out refinance loan allows you to take cash out of your home equity. Additionally, it gives you the flexibility to refinance a non-VA loan into a VA-backed loan.
Who is Eligible?
Let us at Blake Mortgage help determine your VA loan eligibility. Or you can get your VA Certificate of Eligibility (COE) here.
VA home loans are generally available to those who have their Form DD214 and have:
Served more than 180 days during peacetime OR
Served 90 consecutive days of active service days during wartime OR
Are active members of the National Guard for at least 6 years OR
Have served in the Gulf War for 24 months
Are surviving spouses of servicemen either killed or missing in action or due to a service-connected disability
Get Started Now
Blake Mortgage offers VA backed loans through various lenders and can walk you through the process. To see what a monthly payment looks like or to apply for a VA loan, schedule your free one-hour consultation with Harry Panosian, Certified Mortgage Consultant and Certified Financial Planner.
Why you should choose Blake Mortgage?
- Only Blake Mortgage offers you the
Closing Cost Cutter
. Find out how these great options can help guide you to the best decision to meet your financial goals. - With more than 30 years of experience, we’ve designed a mortgage process that adapts to your needs.
- As an approved FHA lender, Blake Mortgage will guide you through the process with minimal fuss.
- Blake Mortgage is the #1 FHA lender based on loan volume for 2014, according to Inside FHA Lending (November 2014).
