VA Loans Advantages
More than 29 million veterans and service personnel are eligible for VA
financing. Even though many veterans have already used their loan benefits,
it may be possible for them to buy homes again with VA financing using
remaining or restored loan entitlement.
Before arranging for a new mortgage to finance a home purchase, veterans
should consider some of the advantages of VA home loans
1. Most important consideration, no downpayment is required in most cases.
2. Loan maximum may be up to 100 percent of the VA-established reasonable
value of the property. Due to secondary market requirements, however, loans
generally may not exceed $240,000.
3. Flexibility of negotiating interest rates with the lender.
4. No monthly mortgage insurance premium to pay.
5. Limitation on buyer's closing costs.
6. An appraisal which informs the buyer of property value.
7. Thirty year loans with a choice of repayment plans:
- a. Traditional fixed payment (constant principal and interest; increases or
decreases may be expected in property taxes and homeowner's insurance
- b. Graduated Payment Mortgage--GPM (low initial payments which gradually
rise to a level payment starting in the sixth year); and
- c. In some areas, Growing Equity Mortgages-GEMs (gradually increasing
payments with all of the increase applied to principal, resulting in an
early payoff of the loan).
8. For most loans for new houses, construction is inspected at appropriate
stages to ensure compliance with the approved plans, and a 1-year warranty
is required from the builder that the house is built in conformity with the
approved plans and specifications. In those cases where the builder provides
an acceptable 10-year warranty plan, only a final inspection may be
9. An assumable mortgage, subject to VA approval of the assumer's credit.
10. Right to prepay loan without penalty.
11. VA performs personal loan servicing and offers financial counseling to
help veterans avoid losing their homes during temporary financial