VA home loans are the most popular types of loans in the country today. Most military personnel and other eligible applicant are looking to take up the VA home loans benefit when buying or constructing their primary residences.
While most veterans understand they qualify for other types of mortgages, most opt for the VA loans. This has seen a considerable increase in uptake of the loans over the years.
Here are some of the top 5 reasons for the sustained popularity of VA home loans.
1. Requires No Down Payment
Even though everyone hopes to own a residence, not everyone has the resources. With the VA loans requiring zero down payment, it allows any eligible person to apply. No other loan comes with 100% financing yet does not charge for a down payment. Otherwise, if you have over 20% of down payment, you are better off with any other type of loan.
2. Provides for Repeat Use
Active military personnel are prone to transfers that keep them staying in different parts of the country. This might require you to sell or rent your residence, which might be quite hectic with an uncleared mortgage. VA loans, on the other hand, allows for repeat use when you move places. The only concern with repeat use is that second loans are a little bit more costly.
3. Flexible Requirements
When giving out loans, lenders understand there is always the chance to default. To keep safe, most lenders provide for stringent requirements like having a good credit history, higher-income to expense ratio, and private mortgage insurance. This is different from VA home loans that requires none of those. The VA loans are backed with assured income and government support, assuring it of fulfillment.
4. Eligibility Even When Bankrupt
Most people dread bankruptcy due to their limiting factor. Other than not able to hold an elective public office, bankruptcy also limits your chances of securing a loan from any other financial institution. This is different from VA loans that allow you to apply even when you are bankrupt. A history of bankruptcy or foreclosure does not affect your eligibility for the credit.
5. Affordability
VA home loans are one of the most affordable loans available. Unlike the conventional loans where you pay for all the costs, a lender of VA loans can pay the closing costs. The loan does also not provide for the pre-payment penalty. This comes in handy for military personnel prone to movements and might need to refinance or sell the loan at any time.
In Conclusion
As long as conventional loans are expensive to acquire and come with several requirements, VA home loans will remain accessible. Even with these certain benefits, you still need proper information before you take up a VA home loan. Research for different lenders to settle on the best one for your needs. Talk to the lender to understand all the terms and conditions before taking the loan.
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