VA loans come in different varieties
VA loans come in different varieties. It can be a fixed rate or an adjustable rate loan which can be utilized to buy a house, new built home, condo, duplex or other types of properties. VA loans can also be used to refinance an existing mortgage or during renovation, or to make your home energy efficient.
No Down Payment Required
For majority of service members who are constantly under the move, saving money and building credit can be really difficult. VA loans allow borrowers to finance 100% value of their home without putting down a single dime. VA loans enable veterans to buy homes with zero down payments.
No Private Mortgage Insurance
VA loans do not require borrowers to pay Private Mortgage Insurance on a monthly basis. The main characteristics of Veteran loans are that the program includes mortgage which is insured by the federal government. The mortgage insurance safeguards lenders against losses from veterans who are unable to pay monthly mortgage payments.
No Closing Costs
Most loans require costing costs. These closing costs include Escrow fees, Inspection fees, Taxes, Homeowner Insurance, Title insurance among others. In VA loans, closing costs are covered by the seller and not buyer. The average cost of closing ranges from 3-5% of the home’s purchase price. Traditional loans require you to pay around $30,000 or more for closing costs. But with VA loans, you may not have to pay anything.
Closing Costs Which Are Non Allowable
In case a buyer opts to fund the closing costs at the time of closing, or if the seller refuses to pay, VA loans reduce the specific costs payable by the purchaser. In traditional purchase transactions, buyers are charged for a surplus amount of expenses including:
For VA loans, these charges are negated and are non allowable.
No Pre-Payment Penalty
A VA loan will not limit your right to sell your house if you decide that you no longer want to own it. You don’t have to pay any prepayment penalty or early exit fee before selling your property. In addition, there are no limitations regarding refinance of your loan.