Every Veterans Day, the entire country stops to recognize and show gratitude to our veterans. At primary Residential Mortgage, we don’t think we should wait. We try to show our appreciation all year long by providing outstanding home loan services to our veterans and their families. These are the top special home loan benefits for veterans.
The VA home loan program is one of the most powerful loan programs on the market for active military and veterans. VA financing comes with essential financial benefits for those men and women who’ve served our country. For a lot of active military and veterans, the VA home loan program has made the path to homeownership much easier.
Qualified veterans can qualify and obtain a VA loan without having to make any down payment. Compared to conventional and FHA loans that often require up to 5% down, this translates into significant savings.
The minimum down payment amount on an FHA loan is about 3.5 percent, and for conventional financing, it’s often 5 percent. On a $300,000 mortgage, that means a borrower would need to save up to $15,000. That is a significant amount of money and often out of reach for the average military borrower. The benefit of being able to purchase a home with $0 down helps veterans experience the American Dream without having to spend years saving for a sizable down payment.
Unlike conventional and FHA loans, a VA loan does not require private mortgage insurance (PMI). On a $250,000 mortgage, FHA’s mortgage insurance can be around $170 per month. It’s an additional monthly fee that’s added to your monthly mortgage payment until you reach 20 percent equity. The cost varies by loan amount and other factors, but often it’s more than $100 per month for PMI.
Since the VA guarantees a portion of each VA loan, financial institutions can usually offer lower interest rates to VA borrowers. Generally, it equates to 0.5 to 1 percent lower than conventional interest rates. The VA’s guarantee provides home loan lenders with a sense of security that enables them to charge competitively lower interest rates. For example,
On a 30-year $250,000 loan, the difference between paying a 4 percent and 4.75 percent rate can be around $40,000 less over the lifetime of the loan.
Since the Department of Veterans Affairs only manages the VA loan program and does not issue loans, it does not set credit score minimums. However, many VA lenders use credit score benchmarks to evaluate a borrower’s risk of default and generally look for a credit score of at least 620. VA loans may also be much more forgiving when it comes to bouncing back after a short sale, bankruptcy, or foreclosure.
There are lots of home loan benefits for veterans and active military. If you’re a veteran, let the home loan specialist at Primary Residential Mortgage help you make your homeownership dreams come true. We’ll answer all of your questions and help you every step of the way.
*Closing costs and fees may still apply
Note: Opinions expressed are solely my own and do not express the views of my employer