Types of Home Loans
VA Loans are one of the most powerful and unique loan programs that are only available to military homeowners and homebuyers. When a military homebuyer is looking for a home they can put no down payment (0% down payment) and pay no mortgage insurance.
The main advantages of VA Loans are:
The table below illustrates how a VA Loan compares to a traditional or conventional home loan.
VA Loans | Traditional or Conventional Loans |
0% Down (for qualified borrowers) VA Loans are among the last 0% down home loans available on the market today. | Up to 20% Down Conventional loans generally require down payments that can reach up to 20% to secure a home loan, pushing them out of reach for many homebuyers. |
No PMI VA Loans are guaranteed by the Veteran’s Administration, you are not required to buy Private Mortgage Insurance. | PMI Required Private Mortgage Insurance is a requirement for borrowers who finance more than 80% of their home’s value, tacking on additional monthly expenses. |
Competitive Interest Rates The VA guaranty gives lenders a greater degree of safety and flexibility, which typically means a more competitive rate than non-VA loans. | Increased Risk for Lenders Without government backing, banks are taking on more risk which, in turn, can result in a less-competitive interest rate on your home loan. |
Easier to Qualify Because the loan is guaranteed by the VA, banks assume less risk and have less stringent qualification standards for VA Loans, making them easier to obtain. | Standard Qualification Procedures Conventional options hold stricter qualification procedures that can put homeownership out of reach for some homebuyers. |
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)