In contrast to the perception of many people, now is an ideal time for service members to buy a home. The fact that mortgage rates are quite low and a lot of homes are selling at greatly discounted prices, any veteran with a good credit score rating and income can buy a great home. Typically, military personnel are afforded access to Veterans Home Mortgage loan program which offers significant mortgage benefits to veterans, active-duty service members, and some existing spouses. This type of loan can serve a variety of purposes, including buying or constructing a new home, repairing an existing home, or refinancing an existing mortgage.
Program Benefits
Although a conventional loan may seem like a good option due to a publicized lower rate, bear in mind that a person often requires a high credit score to be eligible for these great rates. Veterans home loans are usually backed by the existing government, which means lending facilities assume minimal risk with the mortgage and probably price it at a significantly lower rate compared to that which a person would be entitled to from a lending institution. Apart from a lower mortgage rate, other reasons that make Veterans Home Mortgage a better option include:
- The Veterans home loan program cannot deny a loan to a service member based only on a low credit rating. Basically, the program often looks at the last one year of credit history, except for the situation of a tax lien or bankruptcy.
- A down payment isn’t needed for this type of mortgage loan. This helps service members save up to twenty percent of the total value of the loan in comparison to a traditional loan.
- In the event that a borrower encounters a service-related handicap, they may be entitled to the lender waiving the funding fee, thus cutting down on closing costs.
- Borrowers can usually refinance the mortgage loan to a reduced rate within the program.
Beginning the Process
Veterans can start the application process at any lending institution that offers Veteran mortgage loans.