Benefits of a VA Home Loan

Updated: May 16


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Military relocation is a common thing in military families. However, the process is not easy and requires a lot of work put into it as families struggle to wrap their minds about moving and starting all over again in a new place. Thus, Pcs'ing is not something everyone looks forward to as it can be stressful and frequent.


Some view it as an exciting time to start a new chapter, but for others, military relocation can be tough to think about in terms of where you will live and which schools the children will attend. To make the process easier, you can utilize VA home loans to ensure you get a comfortable place for your family and help in easing the relocation process even as you adjust to the new normal. 


VA home loans can help calm spouses and reduce the pressure that causes stress due to military relocation. Some of the benefits of the VA home loans include;




No mortgage insurance or down payment

What is mortgage insurance and how does it work? Mortgage insurance is money paid to secure the lender when the down payment does not exceed twenty percent. Buyers who cannot raise the additional amount have to pay extra money to cover insurance until they reach the twenty percent limit. The mortgage insurance rates can be costly and increase the house's overall cost and monthly repayments.

Fortunately for VA loans, there is no insurance cost required that makes the overall purchase affordable and initial payment cheaper. VA loans do not require a down payment. Thus, you can quickly become a house owner as your loan covers up to 100% of the mortgage cost.

This process reduces stress levels, mostly when PCSing, and the time limit is short. You can thus get the extra money to channel into purchasing furniture or moving what you have to your new location.

The Government guarantees a VA home loan as an initiative to help those on active duty and veterans to be homeowners. The VA strives to secure the lives of those who fight for the country and their loved ones. They give security to banks and other lenders, ensuring that VA loans have competitive rates compared to other conventional loans.

VA loans are not only cheaper but have a shorter requirement list that makes it easier for veterans to own houses. They are not so strict on the credit scores and can be more forgiving when it comes to the veteran's default history. The Government's guarantee that if one is unable to pay, they will take up the burden and provide an opportunity for veterans to get better rates and qualify for higher amounts.


Due to the security offered by the Government, various lenders place competitive prices as they strive to attract veterans to get their VA loans with them. Banks and independent institutions set VA loan rates and, in a bid to outdo themselves to attract veterans, they come up with competitive interest rates that see the veteran benefit.

Lower closing costs

The Government has placed limits on the amount of closing costs that veterans can pay. This act allows the veteran to get their dream house affordably and spreads these closing costs across all parties. 


You can think of it as the Government imposing a ceiling cap on how much veterans can pay in closing costs. The removal of insurance payment and down payment penalties also ensures that the mortgage's total cost is friendly. VA loans also prohibit prepayment penalties, which is a way of lenders ensuring they get more interest from an individual for the number of years the mortgage runs.


This rule ensures veterans are not fined huge penalties for clearing their loans early, saving them money to channel to other investments. For example, in the case of relocation and one has to sell their house and move within a short period, they can apply for a VA loan to help them purchase a home in their new station and clear their current mortgage in the last duty station.


VA loans are assumable.

The term assumable loans mean that if you were to sell your house to another VA eligible veteran, they could assume the rates you were paying and take over your loan. This act is a huge save as veterans are always PCSing 

You can liaise with other veterans in your next duty stations and organize a purchase from another veteran to avoid higher interest rates as you pay what they were paying. You thus get a chance to sample various veterans and see the best rates you can get.


Coupled with the relaxed credit requirements, it is a great idea to clear your mortgage, and especially when there is a looming rise in the interest rates, then the assumable rates ensure getting a house is more effortless.


VA loans have a wide usage variety. 

A VA loan can help purchase a house or repay another VA loan, and the remaining amount used to handle repairs and insurance payments of another place. Thus, the wide variety of what a VA loan can accomplish makes it more lucrative than conventional loans that are more specific and extremely limited in their usage. 

You can add a VA loan and use the amount to pay off your existing loan to purchase furniture and other household stuff for your new place, which is essential when pscing and makes the transition smoother and faster. 


The flexibility of what the money can do makes it very lucrative. The fact that the lender can forgive or overlook past credit defaulting history to issue a loan indicates how the VA has made it easier for veterans to own houses. 


It offers a lifetime benefit that one can continually use as far as you are eligible. Thus, you can have more than one VA loan running simultaneously to ensure you provide your family with the life you want them to have or make investments that will secure their future in case of any uncertainties.



Foreclosure avoidance

This issue is one of the most incredible benefits of VA loans as the VA works tirelessly not only to ensure that veterans can own homes, but they get a chance to keep them. VA loans ensure that if a veteran is unable to pay for the house or in case of death, then the veterans' loved ones are well secured. They do not have to worry about the bank coming to throw them out of the house or left with an amount they cannot pay. 


Because no amount gets paid to access this mortgage, the measures to ensure one retains their house are remarkable and safer than conventional loans. The competitive interest rate also ensure that the amount paid is friendly; thus, one does not encounter high amounts they are unable to pay

Conclusion

VA loans ensure veterans can own homes and take good care of their loved ones. As you serve your country, you want to ensure your family feels secure and taken care of even when far. Having a chance to access a loan from a wide variety that gives you various choices makes the process easier.VA home loan eligibility Thus, you can opt for institutions that have flexible rates as your eligibility has been made easier. 


You can also use other allowances issued during your time in service to clear a VA home loan and ensure you are a homeowner. Consult with other veterans to see what worked for them if you are new to ensure you learn from them and make your process more comfortable.