VA home loans are more popular than almost any other type of mortgage, and when it comes to veterans and service members, there is no better option available. If you are currently serving in the military, or you were discharged after a sizable period of service, a VA loan can provide you with advantageous terms, a good interest rate and an overall convenient means for paying off your new home.
What Makes VA Loans Such a Great Opportunity?
VA home loan offers can be an exciting opportunity to get a new home. Created before the end of WWII to help veterans get better offers on mortgages, VA loans have since helped countless veterans and their families to live better lives and enjoy the prosperity and comfort that a good home can offer.
But why are VA loans so great, and what makes them such a good opportunity? Following are a few of the main qualities that make VA home loans such an attractive option:
- The VA program’s signature benefit is that VA loans require no down payment. A down payment is one of the few things that most mortgages have in common, but with a VA home loan, qualified borrowers can get a loan of up to $400,000 – or even more in some parts of the US – without having to save up for a down payment.
- To this day, VA loans continue to have exceedingly low-interest rates. In fact, VA loan offers feature average interest rates that are lower than the average rate of any other mortgage type.
- There are also looser credit requirements involved with becoming eligible for a VA home loan. Unlike the high credit score benchmarks set by regular and FHA lenders, a VA offer would only require a credit score of about 620 – well below the average for even the best FHA loans.
- The DTI (debt-to-income) ratio associated with VA loans is much higher and more forgiving than what other lenders would require. A qualified VA lender will allow you to pay somewhere between 41% and 55% on debts like mortgages, credit cards or personal loan, while the percentage required by most lenders is much lower.
- Another great thing about VA loans is that they are assumable. This means that – provided that the lender approves – you’ll be able to have someone take over your mortgage payment, in the event that it becomes a necessity.
Impossible Odds: Getting a Mortgage After Foreclosure and Bankruptcy
Bankruptcy or foreclosure not only severely damage your finances, they typically prevent you from securing a mortgage for seven years or more. With VA loans, this isn’t the case.
This bad credit leniency is yet another great reason why VA home loans are truly amazing opportunities for buying a home under nearly any circumstances. VA lenders may allow you to get a new mortgage just two years removed from a short sale, bankruptcy or foreclosure. Also, veterans who file for Chapter 13 bankruptcy protection may be able to seal the deal in as little as a single year.
With these numerous advantages, a VA home loan is an exceptional chance for veterans and service people to obtain the financing they need at rock bottom prices. Moreover, the flexible options available with some of the best lenders in the business will definitely make you think twice before turning down a VA offer.