Surprisingly, most veterans we meet assume a VA loan process will be difficult. It is not more difficult than any other loan programs; however, it requires specific documents to be signed accurately to be acceptable for VA underwriting guidelines so you should work with a mortgage lender who specializes in VA loans to ensure a clean approval. There are many benefits of VA loans, and here are the top three benefits to consider;
1. Zero money down payment with NO PMI
VA loans offer a 100% financing option without PMI (private mortgage insurance). There is no down payment required nor PMI on a VA loan. For example, if the home price is $510,400, then the applicant may borrow up to $510,400 unlike conventional or FHA loans. Most home loan programs require you to make at least 3% or 5% as a minimum down payment with PMI and that is why this is a prominent benefit of VA loan.
2. No Prepayment penalty & VA loan is Assumable
There is no prepayment penalty or early-exit fee no matter the time frame you decide to sell your home. Furthermore, there are no restrictions regarding a refinance of your VA loan. You can refinance your existing VA loan into another VA loan by the agency’s Interest Rate Reduction Refinance Loan (IRRRL) program, or switch into a non-VA loan at any time. Also, VA loans are “assumable,” which means you can transfer your VA loan to a future home buyer if that person is VA-eligible.
3. Lower interest rates & Lenient underwriting guidelines
VA loan interest rates are typically lower than conventional loans, and the current rates are historically low. It is a great time to purchase or refinance home now as the housing market is continuously growing in Dallas and surrounding areas. Rates differ from lender to lender, but our VA loan rates are very competitive in our market. Also, VA loan underwriting guidelines are more lenient compared to conventional or FHA loans regarding credit, income, and asset qualification.
Before you can apply for a VA loan, you need to know if you are eligible for a VA loan. VA loans require a borrower to provide a Certificate of Eligibility. You may contact a VA office directly or contact your lender to check your eligibility. We (IKON Mortgage) have access to a VA Portal (WebLGY) to pull your Certificate of Eligibility (COE) instantaneously on your behalf and with your consent. There is no cost for this service. Please give us a call if you would like to obtain your free COE. A VA loan is a great option for Veterans looking to purchase a home without a down payment and PMI. Our hope is that members of the armed forces who currently serve or have served our country will be served by one of our great mortgage advisors who appreciates and treats them with respect and honor.
“A man is a patriot if his heart beats true to his country” -Charles E. Jefferson