I originally posted this in 2013 on this blog. It has been slightly updated this time. The author is not affiliated with any government agency and is providing general information about available products in the real estate marketplace.
|Vets can check the VA website here
What makes the VA loan so good? It is not any one thing but rather the whole package. The VA loan is a ZERO down program. The veteran does not need to save up a down payment for the house. VA loans are typically priced with the some of the lowest interest rates in the market. The VA loan does not have monthly mortgage insurance. These are strong features that make a VA loan hard to beat.
The VA loan does have a few minor drawbacks. It has a "funding fee" that runs around 2.25%. (funding fee may be waived for qualifying disabled vets) The veteran may finance that fee so the loan remains a truly no down product. The Veterans Administration requires that the property pass not just a standard appraisal, but a special VA appraisal that looks more closely at the quality of the property being financed. This can lead to the veteran having to be a little more selective with offers.
In the current low interest climate, the VA loan has another great feature. VA loans are assumable. A veteran buying a home now will likely have a great low interest rate. In the future when the vet wishes to sell, rates may not be so low. The veteran's ability to allow another veteran to "assume" his loan may make his property more marketable in the future. With rates currently hovering in the mid threes, it is likely this will be a great rate well into the foreseeable future.
Loan products have many variables. If you are a veteran of the US Armed forces I would strongly encourage you to talk to a lender and find out what is available for you. A qualified loan officer can give you all the details about what is required and how the program works. Our veterans have served this country with honor and they deserve an opportunity to own a home without excessive burden. The VA loan is a big step to making that a reality.
Disabled veterans often qualify for additional benefits. I run in to many people some veterans and some not who don't think they can buy a home. All too often they in fact can, and many times for a savings over comparable rent.
If you are veteran look into the VA benefits and the VA Home Loan today. It may be the best thing you ever do.