VA Loans are guaranteed by the U.S. Dept of Veterans Affairs and do not require a down payment, meaning you can finance 100% of the price of the home. Mortgage Insurance Premium (MIP) is not required. Only Military persons and their spouses may be eligible (Certificate of Eligibility required).
Reasons to choose VA
- No down payment
- No prepayment penalty
- Higher allowable debt to income ratio
- Refinance without requalifying
- Free personal finance counseling
Most members of the regular military, veterans, reservists and National Guard are eligible to apply for VA loans. Spouses of military members who died while on active duty or as a result of a service-connected disability also can apply.
Active-duty military personnel generally qualify after about six months of service. Reservists and members of the National Guard must wait six years to apply, but if they are called to active duty before that, they gain eligibility after 181 days of service.
There is a VA fund fee of 2.15% for first-time buyers or 3.3% for repeat buyers.
VA LOANS PROS & CONS
Availability to reduce or increase monthly mortgage costs.
No monthly mortgage insurance premium
Flexibility with bankruptcy and foreclosure
VA funding fee
A down payment of 5% or more can reduce your VA funding fee.
Intended for primary residences
Your primary residence can be an apartment, a houseboat or another form of property that you live in most of the year.
Some home sellers aren’t open to receiving offers from VA borrowers