What is a VA Loan?
If you're a veteran or active-duty service member looking to purchase a home, you may have heard of VA mortgages. But what exactly is a VA mortgage, and how does it differ from other types of mortgages? In this blog post, we'll answer those questions and more.
What is a VA mortgage?
A VA mortgage is a home loan guaranteed by the U.S. Department of Veterans Affairs (VA) for veterans, active-duty service members, and eligible surviving spouses. VA mortgages are designed to help military personnel and their families achieve the dream of homeownership by providing them with more favorable terms and conditions than other types of mortgages.
What are the benefits of a VA mortgage?
There are several benefits of a VA mortgage, including:
No down payment required: VA mortgages allow eligible borrowers to purchase a home with no down payment, which can be a significant benefit for those who may not have the funds for a down payment.
No private mortgage insurance (PMI) required: Unlike other types of mortgages, VA mortgages do not require borrowers to pay for PMI, which can save borrowers thousands of dollars over the life of the loan.
More flexible credit requirements: VA mortgages typically have more flexible credit requirements than other types of mortgages, which can make it easier for borrowers to qualify.
Lower closing costs: VA mortgages have lower closing costs than other types of mortgages, which can save borrowers money at closing.
Lower interest rates: VA mortgages typically have lower interest rates than other types of mortgages, which can result in lower monthly payments and significant savings over the life of the loan.
How does a VA mortgage work?
To qualify for a VA mortgage, borrowers must meet certain eligibility requirements, including having a Certificate of Eligibility (COE) from the VA. The COE verifies that the borrower meets the minimum service requirements to be eligible for a VA mortgage.
Once the borrower has a COE, they can apply for a VA mortgage through a VA-approved lender. The lender will review the borrower's credit and financial information to determine whether they qualify for a VA mortgage.
If the borrower is approved, the VA will guarantee a portion of the loan, which reduces the lender's risk and allows them to offer more favorable terms and conditions.
Final thoughts
A VA mortgage can be a great option for eligible military personnel and their families who are looking to purchase a home. With no down payment required, no PMI, more flexible credit requirements, lower closing costs, and lower interest rates, a VA mortgage can provide significant benefits to borrowers. If you're a veteran, active-duty service member, or eligible surviving spouse, be sure to explore the option of a VA mortgage when considering your home financing options. Reach out today if you have any questions!
Patrick Huley
385-549-6646
NMLS: 1684328