VA loans are possibly the best loan a consumer has available, and rightfully so! For their great sacrifice to our country, our Veterans have access to amazing benefits through their VA home loan. Let’s go over a few of the upsides to a VA home loan.
When purchasing a home using your VA Home Loan you are eligible for 100% financing which means $0 down payment. If you negotiate closing costs from your seller you really could purchase with no money down!
Fast Underwriting and Quick Closing
VA home loans are not as common as conventional home loans so they are often underwritten by a separate department. This makes the underwriting process to much faster allowing or the ability to close quickly.
No Mortgage Insurance
One of the best features of a VA home loan is that even though you are doing 100% financing you not required to have mortgage insurance. For comparison a conventional home loan would require mortgage insurance when putting less than 20% down. This often increases the monthly payment by $100 or more.
No Appraisals on VA Refinances (IRRRL)
If you refinance your VA loan using the VA Interest Rate Reduction Refinance Loan (IRRRL) you are not required to order an appraisal on your home.
Low Interest Rates
VA Home Loans have the lowest interest rates out there!
Minimal Documents Required on VA Refinances (IRRRL)
When doing a VA interest rate reduction refinance loan it is common for the lender to not require income verification to complete the transaction.
Short Term Benefit to Consumer required on VA Refinances (IRRRL)
The main rule that must be followed on a VA Refinance is the 36 months of net tangible benefit. This rules states that the cost of the refinance compared to the monthly savings cannot take longer than 36 months to recuperate or VA will not allow it. Short term benefit required!
Multiple VA Loans allowed for Extenuating Circumstances
In some extreme situations, the VA will actually allow a veteran to purchase a second home using their VA home loan with 100% financing. The rule states that there must be an immediate need for this to happen maybe your family has outgrown your current home and you are having a hard time selling. Or even that you no longer feel safe in your neighborhood.
No Pre-Payment Penalty
Having the ability to pay as much as you want in addition to your normal monthly payment is great. Having no pre-payment penalty allows you to chip away at your principal balance faster and save on the interest!
VA Loans are Assumable
If you are purchasing a home and the current owner happens to have a VA Home Loan as long as you are a veteran you could be eligible to assume the current mortgage in place picking up where the current owner leaves off.
If you are a Veteran take advantage of these great benefits and more by using your VA home loan. Whether you are purchasing or refinancing reach out to your local mortgage broker to see how they can help you!
10 Benefits of a VA Home Loan in 2020 | Rock Mortgage — Houston, Texas