Are VA Loans a good deal?

The VA loan program was introduced after World War II. Its purpose was to offer veterans the opportunity to own their own homes. The VA doesn't lend money or issue mortgages. Instead, it insures mortgages, protecting the lender against any loss if the borrower defaults. Because VA loans are guaranteed they're often easier to get.

VA loans are a good deal for several reasons. First, down payments are not required for VA loans. So it's a great option if you can't make a large down payment, or if you'd prefer to make a smaller down payment and keep some of your money in the bank.

There's also no PMI with a VA loan. PMI means "private mortgage insurance." If you pay less than 20% down on a conventional home loan, you'll have to pay PMI until you have at least 20% equity in your house. Because VA loans don't require 20% down, PMI isn't an issue.

Additionally, VA loans offer competitive interest rates. This is probably the greatest benefit. Many lenders offer low- or no-down payment loans, but the interest rates are much higher. That VA loans can be gotten with little or no money down and at a competitive interest rate makes them a great deal!

Check eligibility requirements before pursuing a VA loan, as they are specific. If you are eligible, you'll need a Certificate of Eligibility. Detailed eligibility information and certificate forms can be found at the U.S. Dept. of Veteran Affairs website.

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