While buying a home is a beautifully empowering feeling for everyone, it holds a special meaning for veterans. After spending years moving from one base to another, it’s finally time to call one place home. If you are a veteran looking to buy a home, you need to know about these government programs that aim to make it easier for you.
The most significant advantage of buying a home as a veteran is VA-backed loans. These are mortgages provided by private lenders that the Department of Veteran Affairs backs. The good news is these loans are available to most veterans, and they have multiple advantages.
First, when buying a home, the largest expense will be the down payment which may be anything from 15 to 20 percent of the full price. The most crucial feature of VA loans is that they come with zero percent down payments. That will save you a considerable amount of money upfront!
Secondly, the credit score requirements for eligibility of such loans are more flexible for VA-backed mortgages. This makes it easier for those veterans with shaky credit histories to apply. This doesn’t mean you should neglect your credit score, of course, as it affects far more than just this one eligibility.
A third advantage is that you don’t have to pay mortgage insurance with VA loans. These are payments usually collected by private lenders if the down payment you can make is below 20 percent. Such insurance is a protection for the lender in the event of a default. Since the government backs VA loans, however, you won’t have to pay the mortgage insurance.
A fourth advantage is a flexibility to choose from different private lenders. Just because the VA backs them doesn’t mean you are forced to choose from a particular mortgage provider. You can opt for the most favorable loans from any of the private lenders or banks.
The fifth advantage of a VA loan is that there is no penalty for prepayment. You can exit early without paying any fee. This gives you the right to sell your house while you are still paying your loan, which is a huge advantage if you need it.
One further thing to keep in mind with a VA-backed loan is that they come with a funding fee that’s usually around 2.3 percent for those using it for the first time. This fee is what funds the program.
Other Lending Facilities
Along with VA loans, there are other lending options for veterans. FHA loans are an ideal option for first-time buyers who can’t make significant down payments. They will also accept those with lower credit scores.
If the property you want is in a non-urban area, you should check whether you can get loans that the Department of Agriculture backs. These loans also require no down payments.
Choosing a Real Estate Agent
Your real estate agent should also know the requirements and modalities for buying homes for veterans. The primary criteria for selecting such a realtor should be that they must have experience with VA-backed loans. If they do, it is a great sign that all the right pieces will then fall into place.