Overall, a VA loan can make it easier for eligible veterans, active-duty service members, and surviving spouses to purchase a home by providing them with more favorable terms and conditions than traditional mortgages such as:
- No down payment required: VA loans allow eligible borrowers to purchase a home with no down payment. This can be a huge advantage, as many other loan programs require a down payment of 10-20% of the purchase price.
- Lower interest rates: VA loans typically offer lower interest rates than other types of loans, which can save borrowers thousands of dollars over the life of the loan.
- No private mortgage insurance (PMI) required: With a VA loan, there is no requirement for borrowers to pay for private mortgage insurance, which can save them hundreds of dollars each month.
- Flexible credit requirements: VA loans typically have more lenient credit requirements than other types of loans, making them a good option for borrowers with less-than-perfect credit.
- No prepayment penalty: Borrowers can pay off their VA loan at any time without incurring a penalty, which can save them even more money over the life of the loan.
- Streamlined refinancing: VA loans offer a streamlined refinancing option, known as an Interest Rate Reduction Refinance Loan (IRRRL), which allows borrowers to refinance their existing VA loan into a new VA loan with a lower interest rate and less paperwork.
- Assistance for disabled veterans: VA loans offer additional assistance to disabled veterans, including funding for modifications to make a home more accessible and grants to help with the purchase of a specially adapted home.