What is a VA Loan?
Created by President Franklin Delano Roosevelt as part of the original Servicemen’s Readjustment Act of 1944, VA loans help create homeownership for service members who sacrifice so much for their country, yet don’t have a fair chance to establish a credit rating because of their service.
Insured through the U.S. Department of Veterans Affairs, VA loans don’t require the borrower to make any down payment or to get private mortgage insurance, amounting to substantial savings. Rates are also lower, and the underwriting standards are far more lenient. Simply put — if you’re a current or former member of the U.S. armed forces, you’re unlikely to get a better deal with any other kind of loan.
We have licensed mortgage originators who specialize in VA loans, and who are dedicated to getting you the best program for your individual needs. They won’t just sell you a home loan but help review your current financial situation and long-term goals, then determine which particular type of loan will best suit your individual needs.
Why would a VA Loan be the best choice for you?
VA loans offer many advantages for current or former service members. Whether you’re looking to buy a home or refinance, you can do so without many of the expenses or restrictions that apply to people seeking conventional loans. This program is in place specifically for your benefit, so why not take advantage of it?
Flexible Underwriting Guidelines – VA-backed loans are far less stringent than conventional loans when it comes to evaluating your qualifications as a borrower, such as debt-to-income ratio and credit. That even applies to past events such as bankruptcies and foreclosures.
No Down Payment Required – The VA recognizes that members of the military can have difficulty establishing good credit. For that reason, borrowers using a VA loan can finance 100 percent of the home’s value with no money down, often saving tens of thousands of dollars in the process.
No Pre-Payment Penalty – Many loan types have a penalty for paying off a mortgage before it matures. VA loans have no such penalty, which means you can pay it off early. That gives you more flexibility if you’re looking to refinance or pursue other options down the road.
Low Interest Rates – VA loans typically have lower interest rates than conventional loans — anywhere from .5 to 1 percent lower. This can amount to tens of thousands of dollars’ worth of savings over the life of the loan.
No Private Mortgage Insurance – If borrowers can’t contribute a minimum down-payment of 20 percent, lenders usually require private mortgage insurance. Since VA loans are insured by the Federal Government, borrowers don’t need private mortgage insurance. This saves them a significant amount of money and allows them to build more equity in the home.
Re-usability - As long as you pay off the loan each time, you can use the benefits of a VA loan over and over. Even if you’ve had a problem such as a foreclosure or you currently have a VA loan, you may be able to get another one. Someone else can even take on the loan, as long as they are deemed eligible by the VA.