VA Loans: Veteran Benefits
VA Loan San Diego is one of the strongest mortgage options available for active military, veterans, members, and their spouses who have died. The VA loan's strength stems from many important advantages that are not available in other mortgage types. In comparison to other credit options, they offer these advantages as one of the main reasons VA loan San Diego volume has been increasing significantly in the last 15 years.
Are the benefits of a VA loan really worth the expense?
This historical benefit program has been an immense help to millions of military families, veterans, and military personnel. Since the Great Recession, the use of VA loans has increased dramatically and these loans that are backed by the government are definitely among the greatest mortgage options available currently.
Let's take a close look at the top benefits of a VA loan.
1. There is no deposit required.
Veterans who are qualified can purchase a home without having to make a down payment. This is one of the greatest benefits of the VA loan. This significant benefit enables Veterans and military members to purchase homes without saving for years to make an ordinary lump-sum payment. You can verify your eligibility for a VA loan San Diego without any money down.
An FHA loan requires a 3.5 percent down payment whereas conventional financing typically requires 5 percent of the down payment. An FHA loan could require $8,700 cash and $12,500 in order to qualify for an ordinary loan for a typical mortgage of $250,000. These are substantial sums for the average military borrower.
2. Private mortgage insurance isn't available.
PMI is an insurance that protects mortgage brokers against loan default. Traditional lenders often demand that applicants pay monthly private mortgage insurance unless there is a 20% downpayment. This is something many veterans are unable to get. Traditional borrowers will have to pay this monthly charge until their home reaches 20% equity. FHA loans come with a type of mortgage insurance, which has to be paid every month.
VA loans aren't required to pay monthly mortgage insurance in contrast to conventional or FHA loans. Since there are no private mortgage insurance veterans who have secured the VA loan in the past year can save thousands on mortgage insurance over the course of the loan's life.
3. Competitive Interest Rates
The VA loan program is also economical for Veterans because it offers the lowest fixed rate on the market.
According to statistics from ICE Mortgage Technology, VA loans have had the lowest average fixed rate for a 30-year period on the market for the past six years. VA loans come with interest rates that are usually 0.5 to 1 percent lower than conventional loans. Veterans can save money every month, and throughout the loan's duration, they can enjoy lower interest rates.
4. Credit Requirements Have Been Reduced
The Department of Veterans Affairs does not set or enforce minimum credit scores since it manages the loan program but is not able to make loans. On the other hand, most VA mortgage brokers utilize credit score benchmarks to determine the likelihood of default of borrowers. Credit score requirements vary however, they're generally lower than those required for conventional loans.
Veterans don't require perfect credit to be able to access home financing at reasonable interest rates. When it comes to bouncing back after a foreclosure, bankruptcy, or short sale, VA loans are more lenient.
While closing costs and fees are included in every mortgage but the VA sets limits on the amount Veterans are able to charge. The other parties involved that are involved in the transaction must pay certain costs and fees. These measures help to allow homeownership to be affordable for those who are qualified buyers.
VA borrowers may request that a seller cover all loan-related closing costs as well as up to 4 percent concessions, including the prepaid tax and insurance, paying off judgments and collections, and much more.
Dennis Sakofsky C2 Financial Corp
2001 Peridot Court, Carlsbad, CA 92009