Charlie Glahe WIN Broomfield

The advantages of getting a VA home loan


As Veteran's Day approaches, we begin to reflect on the many men and women who have dedicated their lives to serving this country. On this holiday, we show them our appreciation for their service, and the U.S. government does the same throughout the year with special mortgage options available to veterans.

These home loans are granted by a private lender and guaranteed by the U.S. Department of Veterans Affairs. They are available to military personnel who have served or are actively serving. The eligibility requirements can vary based on an applicant's time of service, and some veterans' surviving spouses can apply for a VA loan. Additionally, certain documents are required to verify an applicant has served with the U.S. military.

There are many benefits that come with this financing option:

  • Most lenders offer VA loans. This means veterans can choose from a number of mortgage providers.
  • There isn't a down payment requirement. Eligible applicants don't have to put any money down when they receive a VA loan. These savings can be put toward the home inspection. The only caveat is the sale price cannot exceed the reasonable value of the property in question, which will be revealed to the borrower.
  • Borrowers don't pay for private mortgage insurance. For typical low-down-payment financing options, home buyers are required to pay for PMI each month, which provides financial protection for the lender in the event the borrower defaults. VA loans, however, don't have this requirement, and mortgage providers aren't allowed to require it for these loans.
  • Closing costs are capped. In addition to the government prohibiting PMI on mortgages for veterans, it also limits the origination fees, closing costs and appraisal fees a lender can charge.
  • There are flexible underwriting standards. Lending standards for VA loans are typically less strict than traditional mortgages. Credit score requirements are lower, and eligible borrowers don't have to wait as long to qualify for financing backed by the VA following a short sale, foreclosure or bankruptcy.
  • VA loans don't have prepayment penalties. This benefit makes it easy to sell a home financed with one of these loans, as homeowners don't need to wait until a certain amount of time has expired to pay their mortgage balances in full and sell.
  • These loans are assumable. Homeowners can transfer their mortgages to a buyer when they sell their homes.