Using Your VA Loan Benefit

Are you a veteran looking for a home but are concerned you won’t qualify? We understand this concern but you may qualify for your VA Loan benefit. The VA Loan home mortgage benefits is one of the best loans you can get.  Thank you for your service to our country!

Below are 6 advantages of a VA loan. Often the VA loan program is the best option for home buyers if you qualify.

6 Advantages of Using Your VA Loan Benefit

1. Zero Down Payment

The qualified VA Loan borrowers can purchase up to a county’s conforming loan limit with no money down.

Typically, the down payment for home buyers is anywhere from 3.5 to 5% of the loan amount. VA loans do not require a down payment.

The ability to buy with no down payment is a significant advantage for military homebuyers.

2. No Private Mortgage Insurance

If you are a qualified VA loan borrower, there is no mortgage insurance. Most “conforming” mortgage loans where the down payment is less than 20% come with mandatory PMI or private mortgage insurance. Not VA loans. VA Loans are no down payment, no PMI.

The VA loans do come with a mandatory funding fee that applies directly to the Department of Veterans Affairs. However, borrowers with a service-connected disability are exempt from paying this fee.

3. Looser Credit Requirements

Most of the VA lenders are looking for a credit score of at least 620. Borrowers will often need to meet a higher threshold for conventional mortgages, especially if they’re hoping to get a low-interest rate.

As VA buyers, you don’t need anything near perfect credit to secure financing. This is less hassle on the part of homebuyers.

4. Forgiving DTI Ratios

Generally, VA lenders want to see you spend no more than 41 percent of your gross monthly income on major debts such as a mortgage payment or student loans. “DTI” or debt to income ratio, represents the percentage of your debts compared to your income.

Ultimately, your credit score will determine what the percentage of your DTI the lender will allow.

This additional flexibility can make it easier for buyers to maximize their purchasing power.

5. Curbing Closing Costs

The fees and costs veterans can pay at the time of closing are actually limited in VA.

Homebuyers can even ask sellers to pay all their loan-related closing costs and up to 4 percent of the purchase price for things like prepaid taxes and insurance, collections, and judgments.

Additionally, VA lenders can “wrap” your closing costs into the loan. The term “VA no-no” means no down payment, no closing costs.

6. Foreclosure and Bankruptcy

Worried if you experience these financial setbacks? These will not put an end to your VA loan chances.

It’s still possible to secure a VA home loan just two years removed from a foreclosure, short sale, or bankruptcy. If you are a veteran who loses a VA-backed mortgage to foreclosure, you can still be eligible for another.

That’s why the VA loan program is so beneficial for our veterans.

The VA home loan benefit has helped millions of veterans, military families, and service members achieve their dream of homeownership.

If you’re a veteran and thinking of moving to Chico, we specialize in helping veterans buy homes in Chico! If we can help you, please click here for our contact page. We’ll get back to you personally and promptly.

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