VA home loans are similar to conventional loans, but offer greater benefits. This type of financing is only available to veterans and servicemen and women who are currently in the military. A knowledgeable VA loan specialist is a good resource for homeowners who want to find out whether this type of financing is the right type of loan for his or her needs.

VA Loans Have Fewer Requirements

Unlike conventional loans that typically require a down payment of at least five percent (although most are actually higher), this type of loan does not require any down payment. Borrowers can be relieved to know that they will not have to put down a large sum of money on a new house and can instead save the money or use it for other expenses.

In addition to having no down payment, VA mortgages also do not require any mortgage insurance. Without mortgage insurance, borrowers will have a lower monthly mortgage payment and more money that they can use for home repairs or maintenance, debt repayment, or personal expenses.

VA Loan Refinancing Allows for High Loan Amount

Unlike conventional loans, VA mortgages offer a streamlined refinance which features quick and efficient loan processing and does not require a new appraisal. When changing their rate or term, borrowers can borrow up to 100 percent of the appraised value. Although they cannot receive cash back with the streamline refinance, borrowers can cash out up to a 90 percent of their home’s value with a cash-out refinance. Often, borrowers are able to lower their VA loan rate by refinancing, even when the purpose of the refinance is to receive cash back.

VA Loans Have Low Interest Rates and Lenient Credit Requirements

Although interest rates vary due to a constantly fluctuating market, VA home financing tends to have low rates compared with conventional home financing. Unlike other loans that have strict credit requirements and base their mortgage rates primarily on a borrower’s credit history, VA loan rates are determined more by the market than by a borrower’s credit.

An applicant’s credit history will not affect their ability to receive a low interest rate. Because of the more lenient eligibility requirements, more potential borrowers can be eligible for this type of financing than for other types of home loans. One requirement of the VA is that borrowers have no delinquent payments for at least the twelve months before their loan is approved.

Why a VA Loan Could be the Right Loan for You

Although conventional loans are not government guaranteed, VA home loans are guaranteed by the Department of Veteran Affairs at no cost to the borrower. This allows the VA lenders to offer low mortgage rates.

This type of home financing offers numerous benefits that homeowners may not be able to receive with a conventional loan. These loans do not require a down payment or mortgage insurance and they tend to have lower rates than other types of home loans. With current interest rates so low, now is a great time to consider a VA loan.

Victoria Belle-Miller is the newest member of the VeteransLoans.com writing staff. Her background in journalistic writing and ability to evaluate the issues that Americans face in daily life make her a strong addition to the VA loans team and a valuable source of sound mortgage advice.

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