Buying your first home and saving for a down payment can be a challenge. However, if you are a veteran, you may qualify for a VA home loan that can make it easier to buy your first home. VA home loans are an excellent way for first-time homebuyers to get started with home ownership.
VA loan eligibility extends to a variety of individuals including:
- Active duty service members
- National Guard members
- Veterans, provided you meet certain length of service and discharge requirements
- Widows and widowers of veterans, if the veteran's death was related to military service.
In addition, some members of certain organizations, such as the Public Health service and officers of the National Oceanic and Atmospheric Administration, may meet VA loan eligibility requirements, as do certain foreign veterans who served with Allied forces during World War II.
VA home loans are available at many financial institutions, including banks, mortgage companies, and savings and loans. If you qualify, a VA home loan offers many advantages for first-time homebuyers.
VA Home Loans: Easier Qualification StandardsAs many financial institutions tighten their standards for loan qualification, first-time homebuyers may find it difficult to get approved for a mortgage. Since VA home loans are government backed, VA lenders offer more relaxed approval standards related to:
- Credit history
- Credit scores
Keep in mind, however, that qualifying for the VA home loan program doesn’t mean that your loan application will automatically be approved. You’ll still need to demonstrate credit worthiness and an ability to pay back the loan.
No Down Payment RequiredSaving up enough money for a down payment is one of the biggest hurdles first-time homebuyers face. A VA loan can be a great option for first-time buyers because borrowers are allowed to finance the entire home purchase with no money down. Very few other loans offer this valuable benefit.
Lower Monthly Payments with a VA Home LoanMoney is often tight for first-time homebuyers, and a VA home loan could save you hundreds of dollars every month. Here's how:
- A typical mortgage requires you to buy mortgage insurance unless you are putting a down payment on a sizable percentage of your home. This insurance can cost you as much as $100 to $200 per month.
- Since VA home loans are government backed, mortgage insurance is not required, and you enjoy lower payments.
Additionally, the government limits the amount of money lenders can charge for loan origination fees, closing costs and appraisal fees, which also saves you more money.