Updated: May 7
A Veteran's Affairs (VA) loan is a mortgage loan that is guaranteed by the United States Department of Veteran's Affairs. If you are a veteran, an active service member or a military spouse, you may be eligible for a VA home loan. If you are thinking about purchasing your first home, there's a lot to consider. You will want to discuss your VA home loan eligibility and options with a mortgage lender to see if a VA home loan is best for you.
Pros of a VA Home Loan
The VA home loan was created in 1944 to help active service members, veterans and select military spouses purchase homes without needing excellent credit. In addition, the VA loan does not require a down payment. You may be approved for a VA home loan over another home mortgage program if you have more debt. The interest rates are low and there are fewer closing costs for a VA home loan. With a VA home loan you won't need any private mortgage insurance (PMI) because the government guarantees the loan.
The Cons of a VA Home Loan
With a VA home loan, the home that you purchase does need to pass extra VA loan safety standards. This may limit some of you home choices. Some sellers don't like to work with VA home loans. There are some extra fees for sellers to pay and some other misconceptions that sellers have about VA home loans. You will want to find one of the best VA home loan lenders to prepare a pre-approval letter for you. Your lender can also talk to the seller's real estate broker about the VA home loan program and how many transactions go more smoothly because it's a government-backed home loan.
It's best to discuss your VA home loan eligibility and loan details with a mortgage lender who specializes in VA home loans. They will discuss the VA loan rates and other closing costs with you. They will prepare a Good Faith Estimate which will detail all of the costs your will incur as a home buyer. The VA home loan in USA may be your best choice if you're looking to fulfill your dream of becoming a homeowner.