If you don’t know about the VA Loans, the individuals who are eligible to use them, and in what ways can these loans help your business, you’ve come to the right place. Here we have covered all the essential details of VA Loans. Know about this week’s top stories about VA Loans facts.
VA (Veteran Affair) Loans are specially developed for the veterans of US military forces. These loans aren’t just limited to the people who are currently serving the country but any veteran who has been the part of the United States military forces at some point in his life is eligible to benefit from this loan. The folks who haven’t heard of the Veteran Affair loans should know that this isn’t something that has come into existence lately, instead, it first emerged during World War 2. According to experts, VA loans are one of the most flexible home financing options that offer higher debt ratios and have reasonable interest rates than any other conventional mortgages. In short, VA loans make your home much affordable. Let’s have a look at some major facts you should know about VA Loans:
They Offer Flexible Credit Standards
As these loan options are limited to the group of individuals who are part of army force, it doesn’t involve strict credit standards. Usually, the people opting for typical home loans or mortgages would need an excellent credit score to become eligible for loan applications. Since the financial institution only grants a home loan to the people with good credit scores, it becomes challenging for the people with average or low credit score to rely on such institutions. Even if you manage to get a loan at lower credit scores, you may end up paying a super high-interest rate.
On the other hand, VA loans are allowed to the folks with fair and even poor interest rates (starting at approximately 620). So even if you don’t have an excellent credit score, you can afford a home.
There’s No prepayment Penalty for Advance Payment
The foremost factor that every individual would consider before opting for the home loan is the interest rate. Which particular institution offers the lowest interest and provides a flexible payment plan? Well, it’s really challenging for the first-time home buyers to go for a mortgage loan plan as the interest rates are exorbitant and there is nothing like early payment option which can reduce their interest burden. In fact, the lenders may charge a penalty for the advance loan payment. However, this isn’t the case with the veterans who are opting for VA Loan scheme. The veterans are allowed to make the payment anytime they want. You can make an extra payment every month (such as $100) to reduce the interest burden. In fact, you’ll be amazed to see how paying in advance can save you thousands of dollars over the life of your loan.
No mortgage insurance is needed
If you have ever applied for a mortgage loan, you know how exorbitant it is. Not only the hefty interest rates that can cost you an arm and a leg but the additional expenses in the form of mortgage insurance payments is another drawback of this traditional form of home financing. But no need to worry now! If you have ever been the part of the United States army forces, you don’t have to buy mortgage insurance premium.
Just like how the lower interest rates can save you thousands of bucks over the life of the VA loan, the elimination of unnecessary mortgage insurance which cost you up to 1% of the total loan amount can turn out to be beneficial in the long run. For example, if a veteran has decided to buy a home loan that’s worth $100,000, PMI would cost them 1% of $100,000 i.e. $1,000. You can save your $1,000 if you go for VA Loans. Know more VA loan facts here!
VA Loans are for primary residences
If you think VA loans can be used for investing in the real-estate or buying your dream vacation home near the coastal area, you are highly mistaken! VA loans are made available to the veterans who look forward to buying their primary residences rather than the ones who already own a luxurious building and are trying to use the VA loan benefit to invest in some other property. This loan can be used to buy a duplex or other such multi-unit real estate given that you are buying it for your primary residence purpose and are willing to live in there.
So why wait? This way, VA loans can benefit veterans. Make sure to use the scheme sincerely. Note that VA Loans are only available to the veterans who want to buy their primary residence and may not offer help for investing in the working farm, fixer-upper, and etc.