At New England Home Mortgage, requests for VA loans are at an all-time high, and it’s easy to understand why. A loan program established by the United States Department of Veterans Affairs, VA loans help veterans obtain home financing with no down payment, no PMI, and in some cases, no closing costs.
For those who are eligible for VA loans, no down payment is required. For those who are eligible (a Certificate of Eligibility is a requirement for a VA loan), this means you can secure 100% financing on a home. Conventional loans and FHA loans generally require 3.5%-5% as a down payment.
Another top benefit that comes along with a VA loan is there is no PMI, or private mortgage insurance. PMI is a policy that protects the lender when buyers put less than 20% down on a home. With conventional loans, PMI can be canceled once you have reached 20% equity in your home, while FHA requires PMI on every loan for the entire life of the loan. VA loans do not require PMI, saving you money on payments each month.
In addition to no down payment and no PMI, it may be possible for buyers with a VA loan to have zero closing costs. It is possible for the seller to pay for closing costs for up to 4% of the sales price of the home. Talk with your mortgage broker for specifics if this is an option you want to consider.
If eligible for a VA loan, the benefits are clear. Talk with your mortgage lender about your options and the specifications of loans you qualify for.
More questions? Contact us!