If you’re considering becoming a homeowner, here are a few more reasons to use your VA home loan benefits for the first time:
Advantage #1: No money down can save thousands up front
Young military families may not have a lot of cash in the bank to put down on a starter home. Most VA loans can be obtained with no money down within loan limits. Other mortgage programs require between 3.5 and 20 percent cash down just to qualify – even for first-time homeowners.
Advantage #2: No private mortgage insurance can save hundreds each month
VA loans are guaranteed by the federal government. That means lenders don’t need extra insurance to secure the loan. No private mortgage insurance is required for VA mortgages. Other home loan programs require borrowers with less than 20% equity in their homes to carry mortgage insurance.
Advantage #3: VA guidelines state no minimum credit score to qualify
Often, young borrowers have not had a long time to establish credit history. Recent lending market conditions have resulted in tougher credit qualifying requirements for most mortgage programs. But, the VA guidelines still state no minimum credit score to qualify for VA loans. VA-approved lenders may have their own minimum credit qualifying standards, but they are typically more lenient than those for conventional loans. First-time homebuyers with little or no established credit history may still qualify based on VA guidelines. The guidelines state that lenders have flexibility to determine whether each borrower is a satisfactory credit risk.
Advantage #4: VA funding fee is less for first-time home loan benefit users
The VA funding fee is used to help pay costs to administer the home loan benefits program. For first-time users of VA loans, the funding fee is significantly less than it is for subsequent users. Regular military members using their benefits for the first time with less than 5% down pay just 1.4% after November 17, 2011. Subsequent users pay double that. Eligible surviving spouses and disabled vets are exempt from the VA funding fee.
Ashleigh Downing is the Social Media Director for iFreedom Direct. She has been working with and writing about veteran’s benefits and issues for the past three years.
iFreedom Direct is a top national VA lender that specializes in assisting active members and retired veterans of the Armed Forces with VA loans.