Military veterans deserve thanks for their brave acts of courage. If you’re a military veteran in search of a home, Wyndham Capital Mortgage can offer you a VA loan. In fact, we close loans more than a week faster than the industry average*. In addition, there are five unique benefits for those who qualify.
VA Loan Benefit #1: No Need for a Down Payment
Whether you are buying a first home or moving to a new home, down payments can be daunting. For veterans who qualify, a down payment might not be necessary. VA loans have advantageous down payment options that allow the borrower to finance up to 100 percent of the loan value. This means you could have more money to put into savings, take care of other financial needs or take care of repairs, updates and renovations in your new home.
Helpful Tip:
“Just because a VA loan typically doesn’t require a down payment doesn’t mean you shouldn’t consider putting money down. The VA Funding Fee charged on most VA loans can be reduced if you can put as little as 5 percent down. For example: If you have ever had a VA loan before and you are looking to buy a new $300,000 home, you could reduce your funding fee by more than $6,000 just by putting 5 percent down instead of 0 percent down.”
VA Loan Benefit #2: Not Having to Pay Private Mortgage Insurance
Usually, conventional loan borrowers who are unable to put down at least 20 percent of the purchase price of a home may have private mortgage insurance added to their loan. With a VA loan, however, this risk to lenders is less. Because veterans typically don’t have to worry about this cost being added to the monthly payment, it may be easier for them to build up equity in their property and save more in the long run.
Helpful Tip:
“Not having to pay mortgage insurance could increase your buying power by roughly 15 percent, meaning that for the same monthly payment you would spend on a $300,000 house with a Conventional or FHA loan, it’s possible you could look at a $345,000 house with a VA loan.”
Related: 5 Things You Didn’t Know About Mortgage Rates
VA Loan Benefit #3: Including Basic Allowance for Housing as a Source of Income
Active military members who receive Basic Allowance for Housing can count the funds as a source of income when applying for a VA loan. Those same funds could be used to make your monthly mortgage payments. One thing to keep in mind with Basic Allowance for Housing is that it is not the same for all active military members. Factors such as your dependents, pay grade and physical location all determine how much of an allowance you receive
Helpful Tip:
“In addition to this, VA loans are typically easier to qualify for than a conventional loan for current or former military members. In some cases they have lower credit score requirements. They also tend to typically have more forgiving debt-to-income ratio requirements.”
VA Loan Benefit #4: No Prepayment Penalties
A prepayment penalty is a fee paid to the lending institution for paying a loan prior to the scheduled maturity date. Yet another great thing about a VA loan is that they don’t come with a prepay penalty. Pay off your loan early and make extra payments without worrying about that penalty.
Pro-Tip:
“VA loans go a step beyond to make the refinancing process even easier with their IRRRL (Interest Rate Reduction Refinance Loan) program. This is truly a “streamline refinance” where you could take advantage of lower interest rates without the need for an appraisal or income verification documents. It also might reduce the VA funding fee cost, making it more affordable for veterans.”
VA Loan Benefit #5: Potentially Lower Interest Rates
In addition to saving money on not having to make a down payment or pay private mortgage insurance, a VA loan also has favorable interest rates. Usually, there are several factors that go into a borrower’s interest rate for a mortgage. VA loans are backed by the U.S. Department of Veterans Affairs, so it often has better terms and interest rates than other home loans.
Pro-Tip:
“Not only are the interest rates typically lower for VA loans, but you will also often find access to larger “lender credits” with VA loans compared to conventional loans. This allows veterans to avoid some (if not all) of the normal closing costs associated with a loan. This can work for both purchases (to minimize your cash needed to close) and refinances (to make it easier to justify refinancing into lower rates).”
How to Take Advantage of VA Loan Benefits
If you are an active or retired military member looking to purchase a home, it may be time to take advantage of the VA loan benefits available to you. There are three main factors that determine your eligibility for specific VA home loan benefits: your length of service, your duty status and the character of service. Whether you want to take advantage of VA loan benefits to buy a home or refinance your current VA loan with lower interest rates, you can get started today. If you would like more information on eligibility visit the website https://www.benefits.va.gov/homeloans/.
Find out whether you qualify for these five VA loan benefits by speaking with a mortgage professional specializing in VA loans. You’ve served your country, now allow us to serve you and help put you in the home of your dreams.
