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What are the benefits of VA loans?
- No down payment: Qualified VA Loan borrowers can purchase a home without a down payment. Most home loan programs require you to make at least a small down payment to buy a home. The VA loan is a true no-money-down opportunity.
- No private mortgage insurance (PMI): Typically, lenders require you to pay for mortgage insurance if you make a down payment that’s less than 20 percent. This insurance protects the lender in the event you default on your loan. There is no mortgage insurance with VA loans.
- Lower closing costs: The VA limits the closing costs lenders can charge to VA loan applicants. Homebuyers can ask sellers to pay all their loan-related closing costs and up to 4 percent of the purchase price for things like prepaid taxes and insurance, collections and judgments.
- No prepayment penalties: A VA loan won’t restrict your right to sell your home. There’s no prepayment penalty or early-exit fee no matter within what time frame you decide to sell your home.
- Lower interest rates: VA loans typically have the lowest average interest rates of all loan types.