10 VA Loan Benefits

If you’re part of the military community, below are other reasons you should consider a VA loan.

1. 1. No Down Payment

Unlike other mortgage products that require a 5 to 20% down payment, VA loans do without them. Instead, borrowers can finance 100% of their purchase price.

1. 2. No Mortgage Insurance

Borrowers can’t always afford a full 20% down payment. As such, private mortgage insurance (PMI) or mortgage insurance premium (MIP) protects lenders if a borrower defaults on a conventional or FHA loan. VA loans, however, yield mortgage insurances altogether, making for a low-cost product upfront and over time.

1. 3. Government Guarantees

For whatever reason you may concede a monthly payment, the federal government guarantees 25% of the loan to lenders. This government guarantee allows for the 100% financing.

1. 4. Loan Varieties

Contrary to their title, the VA is not responsible for funding nor setting the terms for VA loans. Instead, U.S. banks, credit unions, private lenders, and savings-and-loans institutions set specific conditions and fees. As such, borrowers can shop various VA loan types that best suit their financial capabilities.

1. 5. No Prepayment Penalty

Unlike EWA Beach FHA loans, VA loans don’t charge an early-exit or prepayment penalty for borrowers who decide they no longer need the property. If you choose to refinance your VA loan, you can shift your remaining balance into another VA loan or non-VA loan product at any given time with the help of an Interest Rate Reduction Refinance Loan (IRRRL).

1. 6. Flexible Rates

Whether you’re on the market for a newly-built or existing home, apartment, condominium, or another type of property, borrowers can choose between flexible loan terms to achieve their financial goals. 

1. 7. Simple Eligibility Criteria

To qualify for a VA loan, you’ll need to prove your creditworthiness and provide evidence of sufficient income. However, these requirements offer greater leniency by factoring a borrower residual income and allowing credit scores of under 620 in some cases.

1. 8. Lower Closing Costs

Limited closing costs allow borrowers leeway to finance home improvements, furnishings, and the moving process itself.

1. 9. Flexible Funding Fees

The total cost of your loan, down payment, and other factors determine your funding fee. Other than paying this charge in cash, you can finance it into your mortgage or cede it with VA disability compensation. Unmarried surviving spouses are also eligible to waive this fee.

1. 10. Assumable

“Assumable” loans refer to the act of transferring ownership of an existing VA loan to a future veteran or non-veteran homebuyer. Assumability is especially fruitful when selling a home as mortgage rates rise.

HI Velocity Mortgage and VA Loans in O’ahu

For VA-eligible borrowers looking to upgrade their living conditions, this flexible mortgage can accommodate all types of financial situations. Among its myriad benefits are low costs and the absence of a down payment and mortgage insurance.

If you’re looking for the best VA loan in EWA Beach, we at HI Velocity Mortgage can simplify the application process. Our variety of loan options can satisfy your property goals at the best rates possible. Call us at (808) 727-1055!