Thanks to US Government, veterans, members of the military, reservists and surviving military spouses have access to an affordable mortgage option, commonly known as VA Loan. The VA Loan was createdin the 1940s by the US Department of Veteran Affairs (VA). Its purpose is to provide financial assistance to service members in acquiring and refinancing properties. To date, over 22 million VA loans have been issued. These loans help veterans and military members secure their financial future through the purchase of assets.
If you’re an active member of the military, a veteran, or a surviving spouse of a military member, who is contemplating on applying for a VA Loan, you’re on the right track. In this article, we’ll discuss some basic things you should know about VA Loans. Let’s share a few facts:
Fact # 1: You might not need to pay for a down-payment on your next house purchase.
If you’re opting for a traditional mortgage loan, there’s a massive chance that you will be asked for at least a 20% down-payment for your home purchase. For an ordinary citizen, that could be a significant amount of money. But VA Loans make purchasing a property more accessible and affordable than traditional mortgage methods by requiring very little or no down-payment at all. As a matter of fact, according to statistics, only about 10% of VA loan property purchases made in the past required down-payment.
The VA Loan program may have started in the 1940s, but very little has changed since then. To this day, with a VA Loan a down-payment on your next house purchase may not be necessary at all. However, to ensure the private lending company future loan repayments from your end, you may still need to maintain a good credit score and show some proof that you have a dependable income source.
Fact # 2: You may choose the best interest rate among VA-approved lenders.
Not all VA loans are the same, especially when it comes to VA-approved lenders. Each lender is different, and the loans could vary greatly in terms of interest rates and fees. Before filing for a VA Loan, make sure you carefully consider various parameters when choosing the best VA Loan lender for you. Although costs are among the top considerations in choosing one, you may also want to look into each lender’s VA loan level of expertise and customers feedback.
Fact # 3: Credit score requirements are more flexible.
With a traditional mortgage, an applicant, more often than not, is required to have an excellent credit score. This requirement can make it difficult for many applicants. However, with VA loans, applicants with lower credit scores – with the lowest score being around 620 – may still be granted a mortgage. There is a little downside to having a low credit score as some lenders charge less for clients with excellent credit scores. Nonetheless, applicants with a poor credit score rating still have high chances of being granted a VA loan for purchasing a property.