If you're a veteran or the spouse of a veteran and you're searching for a home, chances are you could qualify for a VA home loan. VA Loans, or veteran home loans, are part of a VA home loan program created in 1944 by the U.S. Department of Veteran Affairs and offer many benefits.
The program has helped 22 million veterans get homes, with 58,774 home loans given in Texas during 2016 alone.
There are many advantages, and a few disadvantages, to the VA home loan program, so it would be wise to do some research before applying. There are also a few requirements that must be met before you can be granted a loan. But to give you a good start on that research, here are some VA loan advantages and disadvantages for you to consider about the VA home loan program...
Advantages of a VA Home Loan
No down payment: This is a significant benefit for any home buyer. Most loans require some form of down payment, and that can cost tens of thousands, depending on the home. Down payments can range in percentage, but anywhere from 3-20% is common.
No monthly private mortgage insurance (PMI) or monthly insurance premium (MIP): This is required for buyers that can't make a down payment of 20% on a conventional loan. You don't have to worry about that on a VA Home Loan.
No prepayment penalty: Pay off your loan at your pace and have no fear of a penalty if you repay it early.
We've talked about the advantages, but what about the disadvantages of a VA home loan?
Disadvantages of a VA Home Loan
Primary residence only: You can't use a VA loan on any residence other than the one you will be primarily living in. This means these loans cannot be used for secondary or investment homes.
Sellers aren't always favorable: Some sellers don't like VA loans. This is due to the myths surrounding the VA home loan program and some of the past issues that the VA had with their inspection systems. This can be seen as a hassle for some home buyers.
These are just some VA loan advantages and disadvantages for you to consider before submitting an application for a VA loan. If you have any questions, please contact us. We'll be glad to help.