VA Purchase Loan
VA home purchase loans help veterans to buy a home at a competitive interest rate. These purchase loans often do not require a down payment or private mortgage insurance.
What is a VA Loan?
A VA loan is a mortgage loan available through a program established by the U.S. Department of Veterans Affairs (VA) (previously the Veterans Administration). With VA loans, veterans, service members, and their surviving spouses can purchase homes with little to no down payment and no private mortgage insurance and generally get a competitive interest rate.
VA loans help active service members, veterans, and their surviving spouses become homeowners. They provide up to 100% financing on the value of a home. Eligible borrowers can use a VA loan to purchase or build a home, improve and repair a home, or refinance a mortgage
The VA sets the qualifying standards, dictates the terms of the mortgages offered, and backs the loan, but doesn’t actually offer the financing. Instead, VA home loans are provided by private lenders, such as banks and mortgage companies.
Benefits of a VA Purchase Loan
NO DOWN PAYMENT
One of the biggest benefits of a VA Purchase loan is that you can purchase a home with no down payment. That means you can finance 100% of the purchase price of your home. This is a huge benefit for veterans who may not have the money saved for a traditional down payment.
NO MONTHLY MORTGAGE INSURANCE
With no monthly mortgage insurance on VA loans you can save you a significant amount of money each month. With a traditional loan, you would be required to pay private mortgage insurance (PMI) if you put less than 20% down. VA Purchase loans don’t require PMI, which can save you hundreds of dollars each month.
COMPETITIVE INTEREST RATES
A VA purchase loan typically offer lower interest rates than other loans. That’s because the VA guarantees a portion of the loan, which protects the lender from losses if you default. As a result, lenders are willing to offer more favorable terms to VA borrowers.
NO PRE-PAYMENT PENALTY
This means that you can sell your home or refinance your loan at any time without having to pay a penalty for doing so. The lack of a prepayment penalty gives you the flexibility to sell your home or refinance if your financial situation changes, without having to worry about penalties or fees.
FLEXIBLE CREDIT REQUIREMENTS
Veterans don’t need anything near prefect credit to purchase a home with a VA loan and their requirements are a lot more flexible than conventional mortgages.