4 Ways VA Loans Help Veterans Afford Their Dream Homes
Veterans and other military personnel can receive special financing if they qualify for a loan backed by the Department of Veteran’s Affairs. VA home loans offer veterans significant benefits to veterans: they can negotiate their interest rate, reduce or finance some closing costs and don’t have mortgage insurance premiums. To celebrate our service members this Veteran’s Day, we’re sharing the ways these loans can help veterans afford the homes of their dreams.
1. There’s typically no down payment required by the VA
One of the biggest challenges to homeownership for first-time buyers is the down payment. Even FHA loans with a 3.5 percent down payment require several thousand dollars in cash up front. Typically veterans can receive a loan without putting money down, however a down payment might be required by a lender or if the purchase price is beyond the reasonable value of the home.
2. There’s no minimum credit score to qualify for the VA home loan program
First, a veteran will need to establish eligibility for benefits with the VA using a Certificate of Eligibility (COE). The VA doesn’t have minimum credit score requirements to qualify for the loan program, so vets can fill out this form without it affecting their credit rating. Lenders are a different story though as they’ll need proof of the borrower’s ability to repay the loan.
Before you apply with a lender, review your credit reports, check your credit score and look for ways to boost your credit score.
3. Veterans don’t have to choose between a loan and a grant
Veterans with a service-connected disability can apply for housing grants from the VA that allow them to build, remodel or adapt a home to fit their needs. These grants can even be used with the loan program so that veterans don’t have to choose. Family members of service members can even take advantage of these grants to make sure their home meets their needs.
4. VA loan benefits can be reused
Veterans who have borrowed using a VA loan can often qualify to use their benefits more than once. After the original home is sold and the loan is repaid the benefits can be reused.
Veteran home sellers may be able to prepay their loan faster or afford nicer upgrades to their new home if they sell by owner. On average, sellers using ForSaleByOwner save $14,000.
Veterans can apply for VA loans with LendingTree and have multiple lenders compete to provide them with the most favorable loan terms.