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VA Loans

If you qualify for a VA loan, there are several significant advantages VA loans hold over the conventional mortgage.

• No down payment: Because the Department of Veterans Affairs guarantees 100% of the loan, you are not required to place a down payment on the purchase of your home. This can be a great advantage if you do not have significant savings for your down payment, or if you simply want to invest those savings elsewhere. According to statistics provided by the VA, more than 91% of buyers with a VA loan forgo the down payment.

• No closing costs: In many circumstances, the seller of the home will pay the closing costs. This is in stark contrast to a conventional loan, where you would pay for the closing costs, including processing, origination, and underwriting fees.

• No private mortgage insurance: Since the VA backs these loans, there is no need for private mortgage insurance, which traditionally protects the lender against default. This can save you $100 – $200 each month, which is often required with a conventional loan.

• More lenient qualifying terms: Obtaining a VA loan is easier than a conventional loan, as the standards for income and credit score as not as stringent. Even if you have less than perfect credit, if you have paid your bills on time for the last year, you can obtain a loan approval – as well as enjoy the same interest rate as buyers with great credit.

• No pre-payment loan penalties: Whereas most conventional loans will penalize you for paying off your loan before your agreed terms, with VA loans, you can pay off your loan at any time – without suffering from pre-payment penalties.

• VA support if you experience temporary financial distress: If you find yourself undergoing temporary financial difficulties, you can obtain support from the VA, which may avoid your home going into default or foreclosure.

• Ability to transfer your mortgage: Another great advantage is your ability to transfer your VA loan to another individual. Therefore, you can transfer your mortgage to your home’s buyer – which can make your home much more attractive in the buyer’s eyes, especially if your VA loan has a competitively low interest rate.

• Unbiased appraisals: A VA-assigned appraiser will evaluate your home for its value, and these appraisers are chosen at random. In contrast, with a conventional home loan, your lender will select the appraiser – which can lead to a biased, inflated appraisal of your home to benefit the lender.