If you’re an active or retired military member, applying for a Veterans Affairs mortgage makes home ownership within reach without losing a lot of cash. California, Texas, and Missouri VA loans are the few financial products that render it easy to gain a foothold in the real estate market. Also available for members of the National Guard, reservists, or active-duty members on any foreign soil, here’s why these mortgage programs are sizzling right now:
No Money Down
By and large, VA loans require no down payment, which practically opens the door to turn your dream house into reality. Although there’s great risk at putting no money down, at least you wouldn’t be forced to pay for a large portion of the cost upfront. You’d get a lot of leeway to borrow the amount you need to quit renting and make yourself a proud homeowner.
No Private Mortgage Insurance
With or without any down payment, you wouldn’t be obligated to pay for mortgage insurance. In a conventional loan, the private mortgage insurance would be part of your monthly repayment until you build 20% equity in your home.
In VA mortgages, the U.S. Department of Veteran Affairs would guarantee the loan, protecting private lenders from possible losses in case of default.
No Minimum Credit Score Requirement
Veteran Affairs has no credit score requirements. However, private lenders might set minimums. Many VA mortgage providers extend credit to borrowers with less impressive credentials in exchange for higher interest rates to offset the greater risks.
Make no mistake, VA loans don’t qualify all borrowers, but their guidelines are generally more lenient than conventional mortgages do. As a borrower, you should need to prove you have adequate income without excessive debts to manage the loan properly. If you improve your creditworthiness, you might qualify for the lowest interest rates and avoid the need to pay for a large down payment upfront.