If you are a veteran, you are entitled to numerous benefits for your service including financial assistance. One of the most helpful benefits is that you will gain access to VA loans when you are considering buying a home. VA loans are a great option for veterans to get the financial help they need to get into the home of their choice.
Keep reading to learn more about what a VA loan is, who qualifies for a VA loan, and the benefits compared to standard lending options.
VA loans are optimal low or zero-down payment mortgage options that are offered to those veterans and active-duty service members that meet eligibility requirements. These loans are offered at optimal rates by private lenders because they are partially backed by funding from the Department of Veterans Affairs (VA). Qualified private lenders can include mortgage companies or banks.
The VA home loan program was initiated in 1944 by the federal government to assist returning service members to secure a loan and purchase a home without requiring a hefty down payment or high credit score. This program has had a tremendous impact and over 25 million VA loans have been guaranteed by the Department of Veterans Affairs. These loans have helped many veterans, active-duty military members and their families to purchase or refinance a home.
Nowadays, the benefits of VA loans are more important than ever with the COVID-19 pandemic affecting the economy in many ways. As it becomes more and more difficult to secure home financing because lenders are tightening their guidelines for borrowers, VA loans continue to provide Veterans and military homebuyers with a low-interest option. This program has been a valuable option for veterans who may face higher credit scores and minimum down payment requirements from other lending options.
The government typically does not make direct loans to veterans. Instead, VA loans are loans offered by private lenders that are secured by a guarantee from the Department of Veterans Affairs. This means that the government agrees to pay off your loan if you are unable to do so. This minimizes the risk that lenders take on in giving out mortgages to veterans.
There are many tools and resources available to help you understand your eligibility for a VA loan and the benefits you may be qualified to receive. Keep reading to get a closer look at the VA loan program including eligibility requirements, benefits, and types of VA loans.