A VA Mortgage (Department of Veteran Affairs) offers loan programs to help service members, veterans, and their families buy homes. The VA does not originate nor service the loans instead, the VA sets the guidelines for loan qualification and guarantees the loan. VA loans are for enlisted service members and veterans.
Key Characteristics VA Mortgage Loans Include:
- Down Payment: There is NO down payment required for a VA Loan. Borrowers can use a down payment if desired. Entitlement Benefit needs to be verified.
- Credit Requirements: VA Loans have a flexible credit history and credit score requirements. Interest rates are impacted by credit score.
- Income to Debt Ratios: VA Loans have a more flexible guideline when it comes to how much home you can afford compared to conventional.
- Private Mortgage Insurance: There is NO PMI with a VA Loan. There is a Funding Fee that can be financed into the loan or paid at closing.
- Loan Limits: There is no loan limit for veterans, service members, and survivors with Full Entitlement for a VA Loan. Consult with your lender to understand Entitlement Benefits.
- Loan Terms: VA Loans typically have the following terms; 30 and 15 year. The 30 year term is the most common.
VA Loans offer flexibility in credit history, credit scores, income-to-debt ratios, job history, NO down payments, and NO PMI, making them a popular choice for veteran and service member homebuyers looking for more flexible options. Borrowers should carefully compare their options, including interest rates, loan terms, and costs before choosing a VA mortgage or exploring other financial alternatives.
