Since it was implemented in 1944, the VA Loan guaranty program has helped millions of veterans become first time homeowners. Today, millions of military members and veterans are eligible to take advantage of VA financing to purchase or build new homes. Even if you have used your entitlement to purchase a home, it is still possible to reestablish your eligibility by completely paying off the original loan. Veterans looking to buy a new house should first consider the many benefits of using the VA to help finance it.
1. No Down Payment. In most cases you will not be required to provide a down payment on the house. The VA guarantees a percentage of the loan, making it very secure for the lender to provide you with a loan with no money down.
2. Increased loan limits. Basic entitlement is $36,000 on loans up to $144,000. An increased 25% may be guaranteed on loans that exceed this amount, up to $417,000. In some counties, the loan limit has been increased even further, making it possible to buy big, expensive homes with no down payment.
3. Flexible interest rates. Because VA Loans are so secure, lenders are often willing to offer you a lower interest rate than with a conventional loan. There are some instances where you can even negotiate a rate that is below the current mortgage market rate.
4. No monthly insurance. A VA Loan is essentially an insurance policy. Because the loan is already guaranteed, you are not required to pay any private mortgage insurance.
5. Minimal closing costs. While you will be required to pay closing fees associated with the loan process, the VA puts a limit on this amount so you are assured of a reasonable price for all charges.
6. Flexible repayment options. When it comes to repaying the loan, you have the option of going with a traditional fixed, traditional ARM, hybrid ARM, growing equity mortgage or graduated payments mortgage. Each plan is designed to suit specific needs and income levels.
7. Early repayment. With a VA Loan you have the ability to pay it off early without penalty.
8. Easy refinancing. The VA offers a cash-out refinance and an Interest Rate Reduction Refinancing Loan (IRRRL). T he IRRRL requires no additional paperwork and no out-of-pocket expenses. A cash-out loan lets you refinance for up to 90% of the appraised value of the house and borrow the money against the house’s equity. The proceeds can be used to pay off outstanding liens, make home repairs, pay college tuition, consolidate debt and more.
9. Additional help. The VA wants to make it as easy and affordable as possible for its veterans to become homeowners, so they are willing to assist you with any questions or problems you run into.
How to Get Started Today
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