Ten Advantages For Using Veterans Administration Home Loans

Ten Advantages For Using Veterans Administration Home Loans

Many buyers don’t know the benefits of Veterans Administration Home loans. Here are the top 10 benefits of a VA loan compared to conventional or FHA financing.

1. There is no money down

A VA loan does not require a down payment. A veteran may choose to make a down payment if they wish. The down payment is not required for purchase. FHA loans and many other loans require a down payment between 3.5% and 20% of the purchase amount.

2. There is no closing cost option

Other loans may have additional closing costs. Closing costs include Homeowners Insurance, Title Insurance, Inspection Fees, Escrow Fees, Taxes etc. The closing costs are paid by the seller if the buyer arranges a VA loan to purchase the home in the best possible way. The closing costs may exceed 35% on average of the purchase price.

3. Seller must pay closing costs. Buyer not allowed to.

The VA will limit the buyer’s ability to pay closing costs, even if the buyer decides to pay them or the seller refuses. The buyer might be charged the following fees in a conventional purchase transaction: Document preparation fees, closing fees, closing fees, documentation fees, preparing loan documents or conveyance fees. Attorney services other than for title work, photos, loan application processing fees, truth-in-lending disclosure statements, fees charges by loan brokers or finders, tax service fees. All of these fees are prohibited with the Veterans Administration Home loan.

4. VA Certificate of Reasonable Value

The appraisal will be used to assess the property’s value, whether you are buying a house with a conventional loan or cash. A certificate of reasonable value will be issued by the Veteran Administration. This certificate can be used for up to six months.

5. VA Home Inspection

The VA inspector will inspect the property to ensure that it meets all Veterans Administration codes during the appraisal. The property must be habitable. The VA protects buyers from purchasing property in poor condition. The VA inspector will inspect the roof, furnace, plumbing, etc.

6. Streamline Refinance at Lower Rates

You can refinance your VA loan if you have already purchased a home. You can refinance with no credit check, employment verification, most documentation, and an appraisal.

7. No Prepayment Penalty.

Most conventional loans require a prepayment penalty. The lender might charge fees if you sell or refinance your home. This can sometimes amount to tens or thousands of dollars in some cases.

8. Points Capped

Lenders and loan brokers often charge a fee to initiate a loan. These fees are often referred to simply as points. There is a limit to the VA’s loan origination fees. The VA won’t allow lenders to charge more than they believe is reasonable.

9. Assumability.

All VA loans are available for other veterans to assume. Conventional loans require that the new buyer obtain a loan. You can sell your property and have your existing loan transferred to the VA.

10. Low rates

Veterans Administration Home Loans typically have very low interest rates. The Federal Reserve sets these low rates in part. Conventional loans can have adjustable rates, which range from 3% to 12%. Fixed rate VA Home Loans will not increase in interest. The amount you pay will not change over the life of the loan. The interest rate you pay is locked in for up to 30 year.

The facts are clear: Veterans Administration Home Loans are the best way to buy a home.

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