If you’re a veteran, servicemember or surviving spouse of a veteran, you’ve likely heard of VA loans before. These amazing nonconventional loans have some great advantages when compared with other types of loans. Millions of veterans, servicemembers and other candidates across the country enjoy the many benefits of these mortgages. Read on to learn more about VA loan benefits and call First Financial Bank – Bill Lavelle whenever you have more questions. Bill works with borrowers in Columbus, Dublin, Powell, Cleveland, and surrounding Ohio neighborhoods.
No Down Payment
VA home loans are secured by the U.S. Department of Veterans Affairs. Because the VA backs 100% of the loans that VA-approved lenders provide, these loans have no down payment requirement. This is a huge benefit when compared with other nonconventional loans (FHA loans require 3.5-10), and conventional loans (which typically require between 10-20%).
No Borrowing Limit
If you meet approval requirements, you can get approved for a loan of any amount. However, the VA will only guarantee a loan up to $453,100 in Franklin County. You can still get a loan for higher than that, but you will need to make a down payment of at least 20% on the difference between $453,100 and your loan. For example, if your loan is $553,100, you’ll need to put a down payment of at least 20% of $100,000, or $20,000.
Limited or No Closing Costs
Borrowers are only allowed to pay a limited amount toward closing costs for a VA loan. In some cases, you can negotiate that the seller pays for closing costs.
No Mortgage Insurance
VA loans don’t require that you pay monthly mortgage insurance (PMI), which can save up to thousands a year. FHA loans, in contrast, have an up-front insurance requirement and a monthly premium that typically lasts the life of the loan. Conventional loans, also, require monthly PMI until at least 20% equity is achieved in a home.
Reuse Your Entitlement
Veterans, servicemembers and other eligible candidates retain their VA entitlement for life. The entitlement speaks to how much the VA will guarantee in repayment for a loan. One great benefit is that the entitlement can be reused over and over up to its maximum, using any that remains or by restoring it in entirety by paying off any existing VA loan.
No Prepayment Penalty
There are no penalties when a VA loan recipient pays off a loan early. The loan can also be assumed by another borrower if it is approved by the VA and the lender.
Start the Path to Homeownership
If you still have more questions about VA loan benefits, First Financial Bank – Bill Lavelle is your local mortgage professional. Bill offers free, no-obligation quotes for clients in Columbus, Dublin, Powell, and Cleveland, OH. Contact us when you’re ready to start the path to owning a home.