Benefits of a VA Loan
What are the Benefits of a VA Loan?
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One of the most important factors in buying a home is the loan. The loan program you qualify for will have a huge impact on your down payment, closing costs, and monthly mortgage payment. There are many benefits of a VA loan vs. other loan programs.
No Down Payment
By far the biggest benefit of a va loan is no down payment. This is a huge savings benefit because a VA buyer will not have to save money for years to be able to purchase a home. The average sales price of a home in the Las Vegas Valley is approximately $232,000 with a 20% down payment of $46,400 on a conventional loan. For a VA buyer that would be a savings of $46,400. This is HUGE!!
Lower Interest Rates
VA loan programs usually have lower interest rates up to .5% to 1% lower. This translates into a lower monthly mortgage payment to the VA buyer.
No PMI or Private Mortgage Insurance
On loans that a borrower doesn’t put 20% down the mortgage company charges a Private Mortgage Insurance fee monthly. This can add up to an average of $100 to $150 per month onto your monthly mortgage. That might not sound like a lot however it can add up to $1000 a year extra. VA loans do not charge a PMI fee monthly however there is a one time upfront VA Funding fee based on service and how many times you have used your VA Loan.
No Prepayment Penalty
Some loan programs charge a fee to pay off your mortgage early. A VA loan can’t charge a prepayment penalty. This way if you need to relocate there is no extra charge to sell your home.
Low Closing Costs
The VA loan program has restrictions on certain fees that a lender can charge a VA Buyer. This cuts down on junk fees that a lender can sometime charge. There are also certain fees that a VA Buyer can’t pay for that must be paid for by the Seller. A Seller can also pay up to 4% of the sales price towards the VA Buyers closing costs where other loan programs only allow the seller to pay up to 3% of the buyers closing costs. This is where working with an agent with VA experience will be necessary. Most agents will not know what to ask the seller to pay for or what the VA Buyer can’t pay for. Not negotiating these items at the beginning can cause closing delays in the end.
Less Stringent Qualification Guidelines
Another major benefit of a VA loan is that the qualification guidelines are less stringent than other loan programs. Most VA Buyers would not even be able to qualify for a Conventional loan.
Purchase any Home that meets Requirements
Any home that meets the condition requirements can be purchased with a VA loan. You can use your VA loan eligibility to purchase a brand new home, a resale, a foreclosure, a short sale, and even an auction home. An experienced agent and appraiser will be able to tell you if the home meets the requirements.
These benefits allow VA buyers who would not be able to purchase a home with most loan programs the ability to be home owners. The VA loan guaranty program was developed in 1944 to promote home-ownership among the returning troops who because of their service were unable to establish credit to buy a home. It is important to remember that it is a loan guarantee program not a loan program. A VA buyer must still qualify for the loan.
Ernie has dedicated much of his adult life to helping others in one way or another. At present Ernie is a leader in the Veterans Association of Real Estate Professionals whose sole mission is to promote home ownership among Veterans. The local Nevada chapter was just established in 2014 and so far they have given away a home to a deserving homeless Vet and volunteered in the local community to promote awareness of the program.
Ernie grew up in a small town in California moving from one rental to another rental his entire childhood. Buying a home in the Henderson area of the Las Vegas Valley was a dream come true. However after his service he didn’t have the greatest credit or money saved up for a down payment. Using the VA Loan eligibility was the only way we were able to purchase a home. We actually were able to purchase a brand new home from a builder. The builder agreed to pay the VA fees that a seller is required to pay and we didn’t have to pay a down payment.
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On our site we have set up the home search to update daily so that you only view CURRENT Available homes. We have made sure that homes that are in “Pending” or “Contingent” status and in escrow are not in the search results. This will prevent you from being frustrated by wasting hours of your time. We are dedicated to helping our clients find the perfect home for them and their situation. We start the process by having a Buyer Consultation with all our clients to go over your needs and the steps to the home buying process.
We understand the process because we have lived through it. If you are thinking of purchasing a home using your VA loan eligibility please contact us immediately for assistance. [email protected] or 702-291-8126.
Gonzales Team of Keller Williams Realty Henderson NV Ernie and Leah Gonzales [email protected] 702-291-8126 10424 S. Eastern Ave Suite 200 Henderson NV 89052