Should You Take Advantage of VA Loan Benefits?

It’s certainly worth looking into if you are:
  • A Veteran
  • Active-duty personnel
  • Reservist/National Guard member
  • An eligible surviving spouse

What makes a VA home loan particularly appealing for many eligible veterans (and their families, when applicable) is that a down payment is not required and they can finance more than 80% of a home’s value or purchase price because mortgage insurance is not required. 

There are some drawbacks too, though, and we’ll guide you through all the questions you’ll want to ask before applying for a VA mortgage. If you’ve already done your homework and know that a VA home loan is right for you, check out our VA Fast Track to get started on your home purchase, renovation or refinance, or get VA mortgage quotes from competing VA home loan lenders.

Get Multiple VA home loan offers to see if it is right for you.

Glossary Terms

Federal Collection Policy Notice
Informs you that the federal government can make your life difficult if you default on your VA loan... <a href='/glossary/what-is-federal-collection-policy-notice' title='See the full definition of Federal Collection Policy Notice'>read more</a>
Veteran’s Administration Loan
A Veteran’s Administration loan is made by an approved lender and guaranteed by the Department of Veterans Affairs <a href='/glossary/what-is-veteran's-administration-loan' title='See the full definition of Veteran’s Administration Loan'>read more</a>
VA Loan
A VA loan is made by an approved lender and guaranteed by the Department of Veterans Affairs. <a href='/glossary/what-is-va-loan' title='See the full definition of VA Loan'>read more</a>
VA Amendatory Clause
This is added to your purchase agreement, must be signed by you and your seller.... <a href='/glossary/what-is-va-amendatory-clause' title='See the full definition of VA Amendatory Clause'>read more</a>
Funding Fee Clause
Lets you know, if you assume a VA mortgage, that a .50 point funding fee is due or will be added to the loan amount... <a href='/glossary/what-is-funding-fee-clause' title='See the full definition of Funding Fee Clause'>read more</a>
Assumption Indemnity Clause
Buyers who take over a VA mortgage must agree to assume all of the obligations of the veteran under the terms of the instruments creating and securing... <a href='/glossary/what-is-assumption-indemnity-clause' title='See the full definition of Assumption Indemnity Clause'>read more</a>

What is a VA Loan?

VA loans are home loans designated specifically for people who have served, or are presently serving, in the U.S. military who want to purchase a primary residence.

VA Home Loans were first made available in 1944 when The Servicemen’s Readjustment Act added this additional benefits package to eligible service members. They are administered by the U.S. Department of Veterans Affairs (VA). The VA does not actually lend anyone money; it backs these loans and reimburses private lenders if borrowers default on them. Because this provides a safety net for these lenders, VA loans are widely available and at a reasonable cost.

VA Mortgage lenders offer a variety of home loans that cover a broad range of needs, including:
  • Building a single family home
  • Buying a single family home, a condominium unit in a VA-approved development, or a co-op unit
  • Repairing, renovating or upgrading your primary residence
  • Refinancing a mortgage
  • Buying a manufactured home and/or lot
  • Making energy-efficient improvements like solar heating or cooling systems

The Benefits of a VA Loan

There are many benefits to if you choose a VA home loan. According to the U.S. Department of Veterans Affairs:

  • No down payment required (unless required by the lender or the purchase price is more than the reasonable value of the property)
  • Buyer informed of reasonable value
  • Negotiable interest rate
  • Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5 percent and exemption for veterans receiving VA compensation)
  • Closing costs are comparable with other financing types (and may be lower).
  • No mortgage insurance premiums
  • An assumable mortgage
  • Right to prepay without penalty
  • For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder.
  • An assistance to veteran borrowers in default due to temporary financial difficulty

Mortgage Calculator

How much house can you afford?

A VA home loan may be the perfect solution for you if you meet all the criteria and you don’t have a down payment. But don’t rule out a conventional mortgage just yet. Let’s see where you stack up.

And, remember, whenever you get competing offers from multiple lenders, you’ll know who can give you the best possible deal.

See What You Can Afford >