In a fluctuating housing market where interest rates are never guaranteed, VA loans offer low interest rates and other great benefits to qualified borrowers and homeowners. This type of financing is exclusively available to veterans and men and women who are members of the military. More individuals are realizing the numerous benefits this type of financing has to offer and are jumping to take advantage of it, even though certain lenders may try to discourage them from looking in to this type of financing for their own reasons. These loans have become so popular that 30% more veterans and service members have used them in 2010 than in 2009.
VA Loan Benefits Veterans and Service Members Can Enjoy
Applicants looking to purchase a new home can save large amounts of money by using a VA loan to finance their home purchase. Unlike other types of home loans, this type of financing does not require a down payment on purchases. Right away, the elimination of the down payment saves homeowners thousands of dollars in out-of-pocket costs! Also, unlike other home loan types, VA loans do not require mortgage insurance, which is another eliminated cost that will save homeowners even more money!
Homeowners who want to refinance their current mortgages can use a VA loan refinance to secure a lower interest rate, which can reduce their monthly costs, as well as long-term mortgage costs. A VA loan refinance can also be used to consolidate debt or to receive cash!
A VA Energy Efficient Mortgage Creates More Opportunities to Save!
Individuals who are concerned about improving the environment and interested in lowering their utility bill can take advantage of a VA Energy Efficient Mortgage (EEM). Those purchasing a home or refinancing can use this type of financing to upgrade their homes with energy-efficient improvements and finance the costs of these improvements into their loan. Eligible individuals can finance energy-efficient improvements that cost anywhere between $3000 and $6000. The reduction in utility costs, combined with the additional benefits offered by financing with a VA loan, will maximize the savings a homeowner can get with this loan.
Loan Eligibility Requirements
In addition to being a veteran or current service member, there are other requirements an applicant must meet in order to be eligible for this type of financing. But the good news is that it is not difficult to qualify for a VA loan. Applicants do not need to have a high credit score to be eligible, although most lenders will require applicants to have a credit score of at least 620. Applicants must also meet certain service-length requirements, as well as income requirements involving a maximum debt-to-income ratio and a minimum residual income that varies based on the size of the applicant's family, loan amount and geographical location.
VA loans can save borrowers thousands of dollars, which is a rarity in this troubled economy. Qualified applicants who are interested in learning more about this type of financing and how they can start receiving benefits should speak with a home loan specialist about the options available to them.