Since VA loans are backed by the U.S. government, the requirements tend to be more flexible, making it easier for veterans to qualify.
Lower insurance
You’ll save on insurance as well, as VA loans don’t require private mortgage insurance (PMI), which most lenders require when you make a downpayment of less than 20% of the purchase price. This insurance protects the lender if you default on your loan. Not having to pay PMI can save you hundreds of dollars each month.
No prepayment penalty
With a VA loan, you won’t have any prepayment penalties or early exit fees, no matter when you decide to sell your home. That means you can sell your home at any time during your loan term without worrying about penalties or fees.
Assumable and refinanceable
Most VA loans are “assumable,” which means they can be transferred to another VA-eligible home buyer. This can be a benefit when the veteran goes to sell their home — especially if interest rates are going up. You can also refinance an existing VA loan into another VA loan using the VA’s Interest Rate Reduction Refinance Loan (IRRRL) program, or switch to a non-VA loan at any time.
THINGS TO CONSIDER WITH A V ER WITH A VA LOAN
One thing you do have to be aware of is a VA loan may not always be the cheapest option. VA loans do have upfront funding fees that can run from 2.3% to 3.6% of the purchase price of the home. The amount of the funding fee will depend on your loan amount,
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