Jackie Cruz

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Jackie Cruz Mortgage Loan Advisor

10 Important Facts About VA Loans

10 Important Facts About VA Loans

Are you one of the more than 16 million veterans and 1.3 million active-duty military members in the United States today? If so, you are likely eligible for a VA loan. Here are the facts you need to know about these helpful mortgages.

  1. VA Loans Are Guaranteed by the VA and Made by Private Lenders
    All VA loans are sponsored by the Department of Veterans Affairs, but the actual loans are originated by private mortgage lenders. This means that the VA will repay the lender up to a certain percentage on any defaulted VA loan. That guarantee removes a lot of the risk for lenders, and they are willing to be more flexible on loan terms with borrowers.
  2. VA Loans Do Not Require A Down Payment
    Most loans require at least a 3.5% down payment. On the median home price of $450,000, that would be almost $16,000 a buyer would have to save up. But with the guarantee of the federal government, VA borrowers do not have to put down a single penny for down payment if they choose.
  3. VA Loans Come with Lower Interest Rates
    Another benefit that comes from being backed by the VA is that lenders are able to offer veterans and service people lower mortgage interest rates than those of conventional or FHA loans.
  4. VA Loans Have No Minimum Credit Score 
    With most mortgage programs, a low credit score could disqualify you completely from buying a home or refinancing. While there is no stated minimum credit score for a VA loan, each lender will have their own standards, but they are typically lower than with conventional mortgages.
  5. VA Loans Do Not Require Mortgage Insurance
    Most loans with a down payment of 20% or lower require borrowers to pay for mortgage insurance, a policy that protects the lender if the buyer defaults. Thanks to the VA backing, VA loans allow borrowers to skip this fee that can cost roughly 2% of the loan balance each year.
  6. VA Loan Benefits Can Be Used Over and Over Again
    As a veteran or service member, you are not limited to just one VA mortgage loan in your life. If you bought with a VA loan, you could sell and rebuy with another VA loan as long as you haven’t used up all your entitlement. 
  7. VA Loans Come with Funding Fees
    While borrowers do not have to make a down payment, the VA does require a funding fee between 0.5% and 3.3% of the loan amount. This fee can be paid up front or rolled into the balance of the loan. In some cases, such as with disabled veterans, the funding fee can be waived.
  8. VA Loan Entitlement Never Expires
    If you served long enough to be eligible for VA benefits (based on how long and what period you served,) your VA loan entitlement can be used at any point in your life. It has no expiration date.
  9. Surviving Spouses Can Get VA Loans
    Un-remarried spouses of service members who were killed in action can typically qualify for VA loans, with the same benefits of zero down payments and low interest rates. They do not have to pay the VA funding fee.
  10. VA Loans Can Be Used to Buy, Refinance, Or Get a Home Equity Loan
    The scope of VA loans is broad. They can be used for home purchases, to refinance an existing loan, and even to pull cash out of your home with a VA Cash Out loan.

You really can’t go wrong with a VA loan. They offer some of the best benefits and terms available on the market.

Give us a call today to get Pre-Approved for a VA Loan!

These materials are not from HUD or FHA and were not approved by HUD or a government agency