Active and past members of the United States Armed Forces are entitled to several financial benefits and the Loan Guaranty Scheme of the Department of Veteran Affairs is one of them. Under this particular program, the Department of Veteran Affairs provides the guaranty for home mortgages taken by veterans and active duty members of the services through a private lender. The VA Loan Program has found a huge popularity among the veteran population of the United States as it offers many lucrative advantages such as –
Little or no effective down payment.
No need to pay for any Private Mortgage Insurance when buying a property with less than 20% down payment.
The ability to reduce your interest rate by getting an Interest Rate Reduction Refinance Loan, also known as the VA Streamline Refinance.
However, before you think of applying for a VA Loan, you must ask yourself certain questions. Here we are going to look at three of the most important questions that you need to ask yourself so that you can take the full benefit of the program.
What are the costs of owning a home with a VA Loan and how do they compare with the cost of a traditional loan?
A VA Loan does ease off the financial burden of owning a home, but there are still certain costs that you need to pay when you are applying for a VA Loan. For example, you need to pay the VA Funding Fee, which would be around 0.5% to 3.3% of the total loan amount, depending on various factors. There are also various other fees that you need to pay during closing, which would mainly depend on the location of the property.
You must get in touch with a professional VA approved lender and get a detailed idea about the closing costs you need to pay for a VA backed loan and then compare the entire cost with the cost of getting a conventional loan, to get a better idea of how much you are going to save.
Should you use all your entitlement in one go?
Most people don’t know the fact that one can actually get more than one VA loan. Yes, every veteran is entitled to a particular amount and if you do not use the entire amount at a time, you would be eligible for another VA loan. This benefit is especially useful for people who are looking to relocate.
So before, you are applying for a VA Loan, think about the future and decide on whether you want to use all your entitlements in one go or you want to buy a less expensive house and keeping some of your entitlement for a VA Loan in the future.
Another important thing that you should do is get in touch with a VA Loan expert before you take the loan. They would let you about all the benefits you are entitled to and how you can make the most of them. So get expert help to get the financial benefits you deserve, under the VA Home Loans Guaranty Program.