If you speak to a mortgage loan officer, you might find out that you qualify for a VA loan. VA loans provide borrowers with a lot of perks, and that is why people often seek these loans. If you don't know a lot about VA loans but are considering getting one, you should know the top perks they offer. Here is a list that can help you understand some of the advantages you may experience by choosing a VA loan.
1. There Is a Limit for the Loan Origination Fee
When you get a VA loan, a mortgage lending institution issues the loan, not the Department of Veterans Affairs. Mortgage lenders can charge fees for issuing the loans, but there is a limit for VA loans. They can only charge 1% for this fee. That is the cap. You benefit from this by paying lower fees for the loan.
2. You May Not Need Cash Upfront
The second perk is that you may not need any cash upfront for the loan. You can get a VA loan with 0% down, plus you can roll all the closing costs into the loan. You can buy a house without having any money to use for the purchase, and this is a significant benefit of VA mortgages.
3. You Won't Pay Mortgage Insurance
Next, you will not have to pay mortgage insurance on the loan, even if you borrow 100% of the purchase price. VA loans require paying a funding fee, which is a one-time expense, but they do not require mortgage insurance. Other loan types require mortgage insurance, especially to borrowers that do not put money down.
4. You May Get a Lower Interest Rate on the Loan
VA loans typically have the lowest interest rates of all loan types. If you compare the rates offered through other mortgage programs, you may see that VA loans have the lowest rates of all.
5. They Do Not Have Prepayment Penalties
Finally, you will never have to worry about getting charged a fee if you pay the loan off early. VA loans do not have prepayment penalties. You can pay off the loan whenever you would like to, and you will never have to pay extra fees if you choose this route.
While these five perks are not the only advantages you can experience, they are the top ones. If you have questions about mortgage loans, talk to a loan officer today.
Share27 April 2020
When it comes to borrowing cash for a new house or a nice car, how much money do you really need? Although you might be tempted to mortgage yourself to the brim or borrow a little more than you should, the fact of the matter is that everyone has financial limits. My blog discusses the impact of borrowing more than you need, so that you can make smarter decisions with your money. In addition to keeping you out of trouble, this valuable information might also improve your quality of life and protect your financial future. You never know, it could make all the difference.
