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Everything You Need to Know About VA Loans
For many Americans, saving 20% for a down payment on a home, much less a down payment at all, can be a struggle. Fortunately, as an active or former member of the United States military, you have certain privileges when it comes to getting a home loan. The U.S. Department of Veterans Affairs sponsors one of the most coveted mortgage products for military members in the form of the VA loan.
Our REALTORS® have worked with countless active military members, veterans, and their families to help find solutions for them to realize the dream of homeownership. Here's everything you need to know about VA loans.
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No Down Payment
Probably one of the most attractive attributes of VA loans is the fact that no down payment is required. Most conventional loans require a 5% down payment with 20% needed to avoid private mortgage insurance (PMI). Most Americans have a hard enough time cobbling together 5% down, and many won't reach the 20% threshold until they've paid as much in equity. Fortunately for veterans, there is no down payment required for a VA loan, meaning you can finance 100% of the purchase price of your home. -
Backed by the Federal Government
VA loans are backed by the full faith of the federal government, meaning that even if a borrower defaults on their loan, Uncle Sam steps in. This makes lending money in the form of a VA loan more attractive to private lenders. -
Lower Interest Rates
Because of the government backs VA loans, interest rates are generally lower compared to private conventional loans. Lenders benefit from the safety a government guaranty provides, and you save on interest over the course of your loan. -
No Private Mortgage Insurance
After the housing crash of 2008, most lenders started attaching private mortgage insurance to all of their loans. PMI is meant to protect lenders in the event of a homeowner's default but can cost a significant amount for the borrower.
VA loans, on the other hand, come with no PMI due to their governmental backing, which will save you thousands of dollars over the lifetime of your mortgage. Your monthly payments will be slightly lower than a conventional loan, and you can put more of your funds toward your principal or other home improvements. -
Easier to Qualification
VA loans are generally easier to qualify for, which means you won't have to haggle as much with lenders in order to get your loan. While you'll still have to provide all of your financial information and have acceptable credit, you'll usually find that lenders appreciate the VA's backing.
Additionally, once you do qualify for a VA loan, you'll be able to shop different VA lenders to find the best rate and terms that work for you and your family. This is all part of the VA's plan to make homeownership easier to attain for active military and veterans.
If you've already got a VA loan lined up, and you're looking for Beavercreek homes for sale, then contact Wright-Patt Realty today to see our current inventory of homes available.