A Veterans Administration (VA) loan can be used to help American servicemen or women and/or their spouses secure financing for a mortgage purchase. You can check with the veterans administration (through its website or through other information exchanges) to find out whether you are eligible given your service history. Only service members who have received honorable discharges and who have served 90 days or more may qualify for VA loans.
Bear in mind that the Veterans Administration isn’t actually giving money towards your house or property. It provides insurance to lenders that you will make good on your obligation. If you get a loan for $417,000 or less, the VA will back you (this number may vary depending on the terms of your contract and agreement with the lender).
The advantages of VA loans are manifold. First, you can purchase relatively large properties without a down payment or with a minimum down payment. 100 percent financing is possible. A VA loan should be used as a leverage to reduce your rates and qualify for a larger house that you might otherwise not get through conventional means -- not as a tool to spend beyond your means.
VA loans don’t have to pay for private mortgage insurance, which can free up some funds for relieving consumer debt. also you can prepay your VA loan without penalties. Finally, your seller can take care of closing costs for you up to 4% of the purchase price, further reducing your upfront cash.
So if you are a Veteran who qualifies, it behooves you at least to compare VA loan rates with conventional and FHA loan programs.
