MARCH 15, 2023 – For those members of society who make the selfless and brave career choice of becoming a serving member of the US military, there are a number of varied and interesting benefits that are available on home soil. One such benefit is access to the VA loan system, which is a home buying scheme specifically for serving personnel and veterans who are looking to get their foot on the property ladder, but might not necessarily have all of the standard requirements that a more traditional mortgage lender might stipulate.
Under the VA loan program, thousands of US military personnel are able to improve their circumstances every year. If you complete a VA loan calculator like the one that can be found at WhatsMyPayment and find that you are eligible for this kind of assistance, then keep on reading to discover some of the biggest long term benefits of a VA loan, and how it can have a healthy impact on your financial future.
- No Down Payment Required
With a traditional mortgage loan agreement, a down payment of anything from 3% to 30% is needed in order to secure the property you want. For many, this amount of disposable cash just isn’t possible, but with a VA loan, no kind of down payment is required at all. This is a huge benefit for many who don’t have the savings they wish they did. It removes the stress of having to come up with a big lump of money to get your foot on the ladder.
- Lower Interest Rates
VA loans are typically considered to be low risk by the government, and that means that they are able to offer much lower interest rates compared to other home loan products. Due to the fact that the armed forces serve under the government, the favorable lower interest rates are always guaranteed.
- Lower Closing Costs
Some homebuyers end up getting caught out by a bunch of closing costs that are much higher than they expected, but not so with a VA loan. Not only are down payments not required, there are fewer, lower or even not required closing costs. VA loan recipients can expect to pay as little as 1% closing cost, whereas more traditional loan programs will require something closer to 3%.
- No Use Limits
There is no limit to how many times a current or former member of the armed forces can take advantage of a VA loan. A recent change to the legislation saw the government announce that this is no longer a limit cap on how many times you can apply for a VA loan, and also no longer a limit cap to how much you might be able to borrow for the home you want to buy. The external lender that you have to deal with might have a cap, but the cap will never come from the VA themselves.
- Assistance With Foreclosure
Foreclosure is an unfortunate reality for some property owners, but VA loan borrowers have a safety net and can get in touch with the Department of Veterans Affairs if they need help in retaining their home to avoid foreclosure. Those who are struggling to make their mortgage payments can reach out to a VA loan backed service like RWM Home Loans.
- No Prepayment Penalties
In some cases, borrowers might be in the position where they want to pay off the remaining balance of a loan faster than the original contract laid out. With most traditional loans, a prepayment may also result in a prepayment penalty, but this is not the case with a VA loan. Borrowers do not need to worry about any prepayment penalties being imposed upon them if they want to pay off their mortgage at a faster rate than was originally agreed.