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VA Home Loan Benefits

Learn about the key VA Home Loan benefits, including zero money down, no PMI and flexible lending requirements.

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Key VA Loans Benefits

The VA Loan – an exclusive VA Benefit for veterans and service members – offers advantages not found in any other mortgage program.

No Down Payment Required

The foremost advantage of choosing a VA home loan is the ability finance 100 percent of your mortgage without putting any money down. However, VA Loan benefits requirements do not restrict potential homebuyers from placing a down payment, and those who can afford to make a down payment may find it beneficial doing so, as it reduces the VA Funding Fee slightly, as well as your total monthly mortgage payment.

Currently, the VA Funding Fee for a first-time VA Loan user with a zero down loan is 2.30% of the total loan amount. However, if a veteran is able to make a down payment of at least five percent, the funding fee can be reduced to 1.65%. Furthermore, a down payment of ten percent will reduce the funding fee to 1.40%. It is also important to note that disabled veterans, Purple Heart recipients and surviving spouses are all exempt from paying the VA Funding Fee.

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No Private Mortgage Insurance

Another extraordinary benefit to VA Mortgages is the lack of Private Mortgage Insurance. Not only is Private Mortgage Insurance not required, but is prohibited by the VA. Private mortgage insurance is a staple of conventional home financing. Even loans backed by the Federal Housing Administration (FHA) have forms of both one-time and annual mortgage insurance.

This lack of Private Mortgage insurance saves homebuyers thousands of dollars over the lifetime of their mortgage.

High VA Loan Limits

The VA does not limit the amount a homebuyer can borrow; however, there are limitation on how much the VA will guarantee. Luckily, these loan limits are exceptionally high, starting at $510,400 and exceeding $750,000 in high cost counties.

Lenient Eligibility Requirements

Due to each loan being guaranteed by the federal government, lenders have the ability to offer more lenient eligibility requirements. Most lenders will look for a minimum score of 620 for a homebuyer to obtain financing; however, other factors – such as income and ability to repay – factor into your eligibility as well.

When considering your loan options, eligible individuals should weigh their decision carefully between borrowing a conventional loan and opting for a VA loan. Although obtaining a VA loan has specific eligibility requirements, individuals who qualify should certainly take advantage of the money saving benefits that a VA loan has to offer over a conventional loan.