As there are many mortgage options available to anyone looking to purchase a new home, it can be confusing when it comes to the “specialty” mortgage products out there, including a VA Loan. VA Loans are $0 down payment mortgage options, a federal program available to United States veterans and active duty military personnel, as well as select military spouses. This type of loan is typically issued by private lenders (not by the government) including mortgage companies, community banks and credit unions, and are guaranteed by the U.S. Department of Veterans Affairs (VA).
Some potential homeowners that fit the criteria for a VA Loan may not qualify for a conventional mortgage, but because of the $0 down payment flexibility and lesser credit standards, it makes it possible to purchase their home. There are loan limitations in place, however, a qualifying potential buyer can place a down payment if a more expensive home is the goal.
VA Loans VS Conventional Loans
There are many differences between a VA Loan and conventional loan. Lenders do not require you to purchase private mortgage insurance, there’s a greater degree of flexibility which equates to a more competitive interest rate. Because the loan is backed by the United States government, lenders assume less risk which equates to easier qualification standards overall. One major requirement that you need to keep in mind – the purchase of any home through this program must be done for your own personal occupancy. To find out more about VA Loans and if you can qualify, contact a local lender today.