VA LOANS: THE HOME LOAN FOR MILITARY MEMBERS AND VETERANS
If you’re a veteran, military member or the spouse of one, then a VA loan could help with your Louisiana home purchase. Designed specifically for America’s Armed Service members, VA loans offer significant savings compared to other mortgage loan options.
Interested in using a VA loan for your home purchase? Read on to learn more about VA loans or reach out to Essential Mortgage today.
ALL ABOUT VA LOANS
VA loans are mortgages guaranteed by the U.S. Department of Veterans Affairs — commonly referred to as the VA. They’re only available for active military members, veterans or certain immediate family members of these personnel.
For those who qualify, VA mortgage loans are almost always the best option when buying a home. Not only do they require zero down payment, but they also cap the amount of closing costs a borrower can be required to pay. Additionally, there is no mortgage insurance required, meaning even more savings up front and over time.
WHO ARE VA LOANS RIGHT FOR?
A VA loan is only an option if you’ve: served 90 days of active military service during wartime, 181 days of active duty during peacetime, or were an active member of the Reserves or National Guard for at least six years. In some cases, spouses of military members can qualify if their veteran or military significant other died in the line of duty or as the result of a duty-related injury.
VA mortgage loans cannot be used by civilians or non-military members. Only those who meet the above service requirements with the Army, Navy, Air Force, Marine Corps, Coast Guard, reserves or National Guard are eligible.
ADVANTAGES OF VA MORTGAGE LOANS
There are countless benefits that come with using a VA loan, and they’re especially effective at lowering the costs and barriers of homeownership for those who use them. They require no down payment, no mortgage insurance and have very limited closing costs. They also offer some of the lowest mortgage rates out of all loan options out there. Best of all, the VA loan benefit can be used multiple times for military members and veterans; it does not expire or run out.
All in all, the advantages of VA loans include:
- Low interest rates
- No down payment required
- No private mortgage insurance costs
- Limits on closing costs
- No penalties for prepayments
DISADVANTAGES OF VA LOANS
There aren’t many drawbacks to VA loans, but there are a few. For one, they do require a funding fee. This clocks in at 2.30 percent of the loan total, but it can be rolled into the balance and paid out over time. On top of this, VA mortgage lenders typically require at least a 620 credit score. This can be higher than what other types of mortgage loans require (especially FHA loans).
Another downside is that not all veterans and military members qualify. You must meet certain time and service requirements in order to be eligible.
Altogether, disadvantages of VA loans include:
- Require a 2.30 percent funding fee
- Can’t be used on rental or income-earning properties
- Have set service requirements
- Require a 620 credit score in most cases
USING A VA LOAN FOR YOUR Louisiana HOME PURCHASE
A VA mortgage loan can help you save significantly on your Louisiana homebuying journey. If you’re a military member, veteran or the former spouse of one, you may be eligible to apply. Reach out to the Essential Mortgage team today to learn more or start your application process.