One of the most important benefits of the VA loan program is the ability to acquire a home loan without making a down payment. This one feature has put home ownership within the reach of thousands of veterans all over the country every month.
According to the VA lender’s handbook, VA loans can be full the full reasonable value of the property. No money down is required by the VA. Other types of loans may not cover the full reasonable value of the home, which is why they require a down payment.
Compared to Other Types of Loans
Both FHA and conventional mortgages require some kind of down payment. While the FHA loans are minimal (can be as low as 3.5%), the conventional loans can often be as high as 10-20%. This means that a home buyer may have to come up with tens of thousands of dollars before close on the house, which is too prohibitive for most potential homeowners.
A VA loan is a great option for potential home owners who do not currently have a large lump sum to put down on a house or for those who have a less-than-perfect credit history. Of course, just because you’re not required to put money down doesn’t mean you automatically shouldn’t. If you still choose to make a down payment, you could get a reduced VA loan funding fee and make even lower payments each month. Contact us today to learn more about your options.