The VA Housing Loan and its Benefits
In 1944, the Congress created a housing program that would make it easier for returning service members to afford their very own homes. This program is popularly known as the VA loan Guarantee Program. The Department of Veterans Affair (VA) has since helped approximately 18 million military soldiers and personnel buy properties or homes for them along with their families.
What is a VA Housing Loan Anyway?
Perhaps one of the most convenient housing loans in the real estate market is the VA housing loan. This is because this housing loan works a bit differently from others of the type. For instance, rather than issuing loans themselves, the VA agrees to repay about a quarter of every guaranteed loan if a borrower happens to default. This in turn gives the lender greater protection when they do business with borrowers from the military. However, this is also what leads to highly competitive rates and stringent terms for qualified military borrowers or veterans.
Benefits of a VA Housing Loan.
One of the most obvious benefits of using a VA home loan is that it allows borrowers to purchase properties with absolutely no down payments. This is a relief considering that there are only a limited number of institutions that offer real estate such loan services. The USDA home loan makes up only a handful of real estate services that offer borrowers 100 percent refinancing.
Other than that VA loans have lenient underwriting standards and requirements as compared to traditional home loans. It is estimated that more than 80% of borrowers cannot qualify for conventional home loans anyway. Moreover a VA home loan does not consist of private mortgage insurance (PMI). Borrowers usually have to pay this monthly charge unless they put down at least 20% of the total loan amount as a down payment. Needless to say, the value of a VA home loan can never be underestimated.
Besides that VA loans come with competitive interest rates that are comparably lower than conventional loan rates. There are also no prepayment penalties and a higher debt to income ration than other home loans of the type.
One of the best states to get VA loans happens to be the state of Arizona. www.vaarizona.net offers a lot of valuable info for military veterans that either live in Arizona or are looking to spend their retirement by moving house.
If you need anymore information on the VA Housing Loan and its benefits feel free to call or email us
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