Benefits of a VA Loan

There are several ways that a VA loan is more advantageous than a FHA or conventional loan. First, though, you have to make sure you are eligible to apply for a VA.  Click this link to see if you satisfy the qualifications needed to get a VA loan.

Now that you know you are eligible, let’s see some of the advantages of the VA loan.  First, there is no down payment required.  You still, however, have closing costs and escrow money to pay.  Secondly, the loan requirements are less strict.  The credit score requirement is lower than for a conventional loan.  Most of the time, applicants with a credit score as low as 620 can still get approved.

Another advantage to the VA loan applicant, is there is no private mortgage insurance (PMI).  Typically, when you take out a conventional mortgage, and you pay less than a 20% down payment, you have to pay a PMI.  This extra charge stays with you until the loan-to-value amount is 78% of the home’s appraised value.

With a VA Loan, some of the closing costs will not be as high as with other loan types.  Here are the closing costs that a veteran still has to pay:  appraisal, credit report, origination fee, recording fee, survey and title insurance.  Speaking of appraisals, veterans can get extra assistance with their appraisal.  If the appraisal value is coming in low, the VA appraiser may be asked to help adjust the value.  The buyer and real estate agent can provide additional details (such as home improvements) about the home that may raise the value.  Typically, they have 48 hours to do so.

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