VA loans are probably the most straight-forward type of loan that there is. Of course, there are certain stipulations and rules that must be adhered to. However, the Department of Veterans Affairs makes sure that U.S. veterans of all ages are given the opportunity to be approved with a VA loan.
VA loans are offered by banks, mortgage lenders and other lending institutions. The Department of Veterans Affairs guarantees these loans and sets forth the guidelines that must be followed. VA loans are available to any current member of the U.S. military-active duty participants. These beneficial loans are also available to retired military personnel, regardless of rank.
Often times, VA loans seem too good to be true. They offer competitive interest rate mortgages with 100% financing and no mortgage insurance. See what I mean? VA loans are extremely beneficial.
When considering whether to choose a VA loan or a conventional mortgage, many people often ask, “How much of a down payment should I plan on if I am considering a VA loan?” The answer is more simple than you would think.
VA loans come with 100% financing. That means that you are not required to pay a down payment of any kind. You won’t have to put 20% down You won’t have to put 10%. You won’t even have to put 3% down. The entire amount of the mortgage is borrowed.
You may, however, be required to pay a small amount of closing costs. These costs are sure to be less than they would be if you chose a conventional mortgage. Sellers could be required to pay up to 3% of your closing costs with a traditional mortgage. Here is where another benefit of VA loan comes into play. The seller could be responsible for paying up to 6% of your closing costs if you choose a VA loan. The contract simply has to state those stipulations and both you and the seller must agree to the terms.
VA loans come with more benefits than conventional mortgages. You can get:
- 100% financing
- No mortgage insurance
- A higher portion of your closing costs paid by the seller
- Competitive interest rates
- Equal opportunity lending
- And so much more
If you qualify for a VA loan, you might as well take advantage of it. You won’t be able to qualify for these types of benefits with standard mortgage loans.
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