Are you a prospective homebuyer looking to get financing for the house of your dreams? If you’re a veteran, you may get into a VA loan program. The latter provides you with government-backed and flexible loans. This is an ideal option for veterans who are struggling to obtain financing.
Here are the top reasons to consider getting a VA loan instead of the other options available.
No Need for a Down Payment
Some veterans find it difficult to accumulate a substantial savings account and a high enough credit score to obtain a different type of loan such as fixed-rate or adjustable-rate. In a VA loan, borrowers can get financing for their house with the need for a down payment. This is an ideal option for those who are frequently on the move or don’t have enough money in the bank.
Competitive Interest Rates
A home loan’s interest rates depend on a bank’s assumed risk to finance it. A VA loan has a stable financial backing that comes with a guaranty, which means that lenders have lower risk and can provide their debtors with interest that hovers around 0.5% to 1% lower compared to the ones you’ll find in the market.
There Are No Pre-Payment Penalties
Other loans have a prepayment penalty when a debtor pays off a home loan before its maturity date. This is so because creditors can no longer get payments from interest; the pre-payment in some contracts is one way for a lender to recover some of the money they put into financing your house. You don’t have to worry about incurring this penalty if you get VA loan.
VA loans have a lifetime benefit for those who get it; you can use the program again and again throughout your lifetime. You can even have two VA loans simultaneously, and you are still eligible even if you’ve used your benefit years ago.
These are just some of the reasons to get a VA loan to finance your dream house, especially if you’re a veteran. Use these to your advantage to finance a home and get good value interest rates and payment terms.