What is a VA Loan?
A VA loan is a mortgage loan program established by the United States Department of Veterans Affairs to help veterans and their families obtain home financing. VA loans are provided by private lenders. This type of loan is typically fixed-rate and terms run from 10-30 years.
What are the requirements for a VA loan?
To be eligible for a VA loan, you must have:
Pros of a VA Loan
VA loans offer 100% financing, allowing you to buy a home with no down payment. There is also no private mortgage insurance with VA loans. This advantage allows you to build more and more equity in your home. VA loans have competitive interest rates and can be easier to qualify for than conventional. If you qualify, additional benefits may include basic allowance for housing and no pre-payment penalty.
Cons of a VA Loan
VA loans hold some big advantages for veterans and their families, but there are some downfalls. The VA charges a funding fee, or percentage of the home price, to cover operating costs. When you put no money down and factor in this fee, you could have a loan that exceeds the market value of the house.
Finding the best loan for your personal needs can be overwhelming. New England Home Mortgage strives to help you understand all your options and find the best fit for your financial situation. Read an overview of our mortgage options here, or contact us today for an in-person appointment.