Benefits for Military and Veterans Homebuyers
Setting down roots and finding a home you can call your own has always been at the top of anyone's goals. Living the American dream with the white picket fence has been so deeply ingrained in all of us and having your own home has been a yardstick of success for most. For Military and Veterans, they have not lost sight of this goal as they firmly believe in home ownership. But with the modest and meager salary that our servicemen are receiving it can be tough for some veterans to get a financial foothold, let alone land a home loan. But the good news is that with the VA Loan program created in 1944, the Department of Veterans Affairs has backed over 21 million loans making buying a home easier to those who need it including veterans, active-duty military and their spouses.
Typically, veterans and active-duty service members can be eligible for a VA home loan if they served in the following capacity:
- 90 consecutive days on active duty during wartime
- 181 consecutive days on active duty during peacetime
- 6 or more years in the National Guard or Reserves
Some spouses of military members who died in the line of duty or of a service-related disability may also be eligible for a VA loan.
The VA loan can be used for a number of purposes, including:
- Purchasing or building a new home
- Refinancing a current mortgage
- Repairing or improving your existing home, or installing home efficiency measures
Here are the benefits of getting the VA Loan Program
No down payment requirement
For most first-time homebuyers, they may not have saved enough for a sizeable down payment for a home and not have additional cash from the sale of a prior home to put toward their real estate purchase. For servicemen availing the VA Home Loan Program, it enables eligible borrowers to purchase a home with no down payment required. Most mortgage programs today requires at least 3.5 % to as much as 20% down payment in buying a home. With the VA home loan, it would help p first-time borrowers save their money and put it towards the needs of their new home.
No mortgage insurance
For first time homebuyers who would like to go through the conventional loan program, a private mortgage insurance (PMI) is usually required for those who are unable to put down a 20 percent downpayment. Most mortgage programs would often require a monthly PMI or even an upfront payment. As an added benefit of the VA Loan Program, The VA backs a portion of every VA loan, which does away with the need for PMI.
Limits on closing costs
The VA loan limits the fees and additional costs that veterans and military pay at the time of closing. Homebuyers can ask sellers to pay all of their loan-related closing costs and up to 4 percent of the purchase price for things like prepaid taxes and insurance, collections and judgments.
More lenient credit requirements
Credit checks are mandatory if you're planning to purchase a home and for most, they would have to establish a good credit standing over time before they can even qualify to buy. VA qualifying guidelines can be more relaxed than those of conventional mortgages.
For additional facts about the advantages of VA loans for first-time homebuyers, contact an experienced veterans' mortgage professional.