Purchasing a home is a big step for anyone and can mean a great deal. But with veterans, buying a home means stability for themselves and their families. For that reason alone, stability for those individuals who have served and are currently serving our country shouldn’t come at an exorbitant cost. The US Veterans Affairs understands the importance of veteran homeownership and wants to ensure that veterans are afforded all the possible advantages that come with purchasing Lake Las Vegas homes for sale. Thus, the VA offers loans that are specifically tailored to veterans known as the VA Loan Program. These VA home loans have a long list of benefits. The five biggest benefits include optional or significant reduced down payments, no PMI or monthly mortgage insurance payments, lower interest rates, no penalties for prepayment, and a foreclosure avoidance program.
Down Payment, Interest Rates and More
The number one benefit for most VA approved buyers is the lack of a down payment. Generally, lenders require a down payment that ranges from as low as 3 percent to over 5 percent and higher depending on the potential buyer’s credit. Furthermore, depending on the down payment amount required for a buyer’s FHA or Conventional mortgage, PMI or mortgage insurance is added to the overall purchase price. Having no down payment required and no PMI / monthly mortgage insurance means there is more flexibility for a veteran purchasing a home and more available funding.
If VA approved buyer does decide to provide a down payment, this only reduces an already minimal VA funding fee—making homeownership even more affordable. Another benefit of veteran homeownership is the fact that VA mortgages have the industry’s lowest interest rates. With the lowest interest rates available, it is easy for veterans to acquire homes, and even easy form them to pay off their mortgage loans in record time (without fear of prepayment penalties). In addition to avoiding prepayment penalties, veterans are also provided VA sponsored foreclosure avoidance advocacy. This advocacy program ensures that veterans can keep their homes and helps individuals who are facing a possible foreclosure find reasonable alternatives.
Having the best chance at affording, paying off, and keeping your home may sound too good to be true. But the truth is the benefits to veteran homeownership do not stop there. As a veteran, purchasing a home affords you all of the same financial perks that come with standard homeownership plus a few unique incentives such as limited closing costs, seller concessions, and VA specific refinancing options. When a qualified buyer receives limited closings costs, the seller covers all costs associated with closing and includes a 4 percent seller concession (seller concessions can be less than 4 percent and are contingent on agreed-upon terms between seller and buyer). In terms of refinancing, veterans benefit from two key programs. Veterans are eligible for VA loans on properties they previously acquired with standard or conventional financing. They are also offered the chance to lower their current VA loan payments with newer/better interest rates when they become available. These refinancing options allow veterans to always benefit from the best rates and loan programs.
Assumable Mortgages and Second-Tier Entitlements
Lastly, veteran homeownership allows for assumable mortgages and second-tier entitlements. Assumable mortgages permit another party to take over a VA home loan or established a VA mortgage. By doing so, family members and other individuals are given access to better interest rates. Second-tier entitlements, alternatively, provide veterans with the opportunity to use the remainder of their unused VA loan allowance or purchase another home via a restored loan entitlement. Both these benefits are just a few more ways veteran homeownership is advantageous.