A VA loan is an excellent option for military members interested in purchasing a new home or refinancing their previous property loan. VA Loans are a powerful and flexible lending option available to those who qualify. More specifically, these loans are issued to active US military members, Us Military veterans and their spouses. The United States Department of Veterans Affairs, a government agency, is responsible for backing all loans of this type. Once a VA loan is issued, the VA pledges to repay approximately a quarter of every loan that it guarantees in the unlikely event the borrower defaults on the loan. That guarantee gives VA-approved lenders stronger protections when lending to military borrowers that often leads to highly competitive rates and terms for applicants who meet the stricter qualification guidelines.
While these loans are some of the most flexible, they are not available to everyone. These loans are designed for and issued to veterans. To qualify, you must have 181 days of service in times of peace or 90 days of service in times of war. A spouse of a veteran or a widow who has not remarried can also qualify for a VA loan.
BENEFITS OF VA LOANS
The most significant benefit of a VA loan is the borrower’s ability to purchase with no money down. Apart from the government’s UDSA’s Rural Development home loan and Fannie Mae’s Home Path, it’s nearly impossible to find a lending option today that provides borrowers with 100 percent financing.
VA loans also come with flexible underwriting standards and requirements when compared to their conventional loan counterparts. These loans also come without the requirement of private mortgage insurance. These perks can help borrowers with their homeownership goals by making it easier to get started as well as save them some money in the long run.
VA loans offer a few other benefits for qualified borrowers:
- Competitive interest rates that are routinely lower than conventional rates
- No prepayment penalties
- Higher allowable debt-to-income ratios than for many other loan types
- Streamlined refinancing loans that require no additional underwriting
It is essential to note that when you choose to take out a VA loan, there will be a one-time fee will be required. The amount of the fee will depend largely on the loan size needed and the type of veteran applying for the loan.
Do you have more questions for us? Please don’t hesitate to contact GEM Mortgage today to find out if you qualify for a VA loan! We’re always more than happy to help you find the answers to your important questions.