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VA Mortgage Financing Benefits

What are the financing benefits of the VA home loan program? How do they compare to other mortgages out there? Can anyone take advantage of them?

The VA program for buying a house has considerable benefits when compared to other mortgages offered out there.

Let's just compare it with the FHA loan products, which are designed as a loan for families to buy one to four bedroom homes. FHA is an awesome program too so let's compare them.

Let's take a look at the FHA benefits first.

FHA Loan Benefits

  • Terms of 15 or 30 years
  • Monthly Repayments
  • Minimum down-payment of 3.5%
  • Less focused on your credit score than conventional programs
  • Allows you to leverage the loan more heavily than many conventional mortgages

As you can see, those are pretty cool advantages. One of the limitations is you need to be a first home buyer to qualify. The cool thing is you can become a first time buyer again. You just cannot have owned a home for three years to re-qualify as a first buyer.

Now let's consider the VA program.

VA Benefits For Buying a House

va financing benefits
  • No Pre-payment Penalties
  • Can apply for the loan just 2 years after you have emerged from bankruptcy.
  • Can apply for the loan just three years after a foreclosure.
  • Home can be financed up to 100%.
  • No down payment required.
  • Loans typically limited to $484,350
  • No mortgage insurance premiums to pay
  • Loans tend to be at preferential interest rates because of the Government underwriting

Both of these options have considerable financing benefits in comparison to many other open-market financing options; but the VA program is  clearly superior and offer some cool advantages. 

Unfortunately, not everyone can use this awesome program. You must be a veteran to qualify. But let's take a closer look at this arrangement.

Additional Financing Benefits

The biggest of these is that potentially a veteran and his family can buy a home without the need for a down payment, whereas FHA loans require a minimum down payment of 3.5%.

This doesn't sound like a lot, but consider for a moment that the average median sales price for a home in the Bronx in New York for example was $366,010 in November 2011, and so 3.5% of that is $12,810 that would have had to be found as a down payment. And as the exact same story is repeated right across the country, it immediately becomes clear why NOT having to pay that is a big advantage.

In addition, the VA home loan program is automatically available to ALL eligible veterans, and the nature of the way it works means that it is very attractive for lenders to loan money to veterans to purchase homes under this scheme.

And if you have ever previously been foreclosed on, or suffered a bankruptcy, then the terms of the VA Mortgage Loans scheme are quite simply the most lenient around.

Both schemes are potentially useful, but if you are a veteran (or a veteran's wife) and are eligible, then you should certainly look more closely at the financing benefits of VA Mortgage Loans. 

Where Would You Like to Go Next?

If you have any questions on these financing benefits for a VA loan, don't hesitate to ask it here.

Remember, even for a VA loan you need to make sure to have good credit.

Leave Financing Benefits and return to Home Mortgage Information main page.

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