There Are Multiple Veteran Advantages
One of the biggest advantages of a VA loan is that you don’t need a down payment. None whatsoever! Most mortgage programs, such as FHA and conventional loans, require at least 3.5 percent to five percent down. That’s up to $12,500 on a $250,000 home purchase.
But, as a veteran, you can buy immediately, rather than years of saving for a down payment. With a VA loan, you also avoid steep mortgage insurance fees.
With a VA loan, you also avoid steep mortgage insurance fees. At five percent down, private mortgage insurance (PMI) costs $150 per month on a $250,000 home.
With a VA loan, you could afford a home worth $30,000 more with the same monthly payment, simply by eliminating PMI. Using a VA loan saves you money upfront, and tremendously increases your buying power.
Loan rates are typically about 0.25% lower than those of conventional loans. The VA backs the mortgages, making them a lower risk for lenders. Those savings are passed on to you as a Veteran.
Seller concessions are when the buyer asks the home seller to pay costs associated with the VA Loan. The seller is allowed to pay all of the veteran’s closing costs, up to 4% of the home price. So, it is possible to avoid paying anything out of pocket to buy a home.
A VA loan can have a fixed-rate or an adjustable-rate. It can be used to buy a house, condo, new-built home, manufactured home, duplex or other types of properties.
Or, it can be used to refinance your existing mortgage, make repairs or improvements to your home, or make your home more energy-efficient. The choices are yours.
Housing Channel is a 501 (c) (3) nonprofit in Fort Worth helping low- and moderate-income families BUILD WEALTH through HOMEOWNERSHIP. In the process, we educate and empower homeowners to lift neighborhoods and strengthen communities.
The TSAHC targets the housing needs of low-income families and other underserved populations in Texas who do not have acceptable housing options through conventional financial channels.