VA Loans

VA loans help those who have served or are serving our country purchase, build, repair, retain or adapt a home for personal occupancy.

VA loans are available to those who have served or are serving our country. A version of them was first introduced in 1944 when Congress passed the original Servicemen’s Readjustment Act.

While specifics have changed over the years, the principal is still the same: The U.S. Department of Veteran Affairs (VA) is authorized to guarantee or insure home, farm and business loans made by lending institutions.

These loans are not designed nor can be used for investment properties. They are given to help buy, build, repair, retain or adapt a home for personal occupancy.

Who Qualifies?
• Veterans
• Active-duty personnel
• Reservists/National Guard members
• Some surviving spouses

What are the Benefits?
No Down Payment – When you are constantly on the move as a service member, it can be difficult to save money for a down payment. For qualified borrowers, you can receive a VA loan without putting down a dime.

No Private Mortgage Insurance – Especially in the wake of the Great Recession, private mortgage insurance (PMI) is required for most borrowers who are unable to put down at least 20 percent. PMI protects lenders in case a borrower defaults.

VA loans are backed by the federal government and therefore rarely, if ever, require PMI. Because you aren’t required to pay a PMI, you’ll be able to build equity in your home more quickly. This will save you thousands of dollars over the lifespan of your mortgage.

Competitive Interest Rates – Mortgage interest rates are based on the risk assumed by the lender. Because your VA loan is backed by the federal government, it is considered less risky. Typically, you’ll enjoy a 0.5 – 1 percent lower interest rate than with a conventional loan.

Basic Allowance for Housing – If you are an active military member receiving a Basic Allowance for Housing (BAH), this sum could be used to help you qualify for a VA loan. BAHs vary based on pay grade, location and number of dependants.

No Pre-Pay Penalty – With many loans, paying them off early can result in a pre-payment penalty. Why? Because if you pay early lenders don’t receive the funds from your interest payments. The pre-payment penalty allows them to recoup some of these lost earnings. But with a VA loan, you won’t be penalized, allowing you to save the total amount of interest you would have otherwise paid.

Contact one of our Loan Officers to learn more about VA loans today.


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