VA Loans
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Overview of VA Loans
VA loans are a powerful benefit of military service, offering significant advantages to eligible homebuyers. These loans are provided by private lenders but are guaranteed by the Department of Veterans Affairs, reducing the risk for lenders and making it easier for service members to secure financing.
Key Features of VA Loans
- No Down Payment: One of the most significant benefits is the ability to finance 100% of the home’s price without a down payment.
- No PMI: Unlike conventional and FHA loans, VA loans do not require monthly private mortgage insurance, even with no down payment.
- Competitive Interest Rates: The VA guarantee allows lenders to offer lower interest rates compared to many conventional loans.
- Limited Closing Costs: The VA limits the closing costs lenders can charge to VA loan applicants, making the loan even more affordable.
- No Prepayment Penalty: VA loans allow borrowers to pay off their loan early without any penalties.
Eligibility for VA Loans
Eligibility for a VA loan is based on service duration, duty status, and character of service. Eligible borrowers include: Veterans, active-duty service members, National Guard members, Reserve members, and some surviving spouses. Applicants must obtain a Certificate of Eligibility (COE) to prove their eligibility to lenders.
Using VA Loans
VA loans can be used to buy a home, condominium unit, build a home, simultaneously purchase and improve a home, improve a home by installing energy-related features, or buy a manufactured home and/or lot.