There are many reasons to choose VA loans for first-time home buyers who are veterans – retired or in active duty. These veterans if they are buying their primary residence will qualify for added benefits through a VA loan program. For instance, most VA loans don’t require down-payment unlike conventional loans. An obvious reason for this is that many first-time veteran home buyers who have spent most of their time serving their country do not accrue enough savings for a down-payment. Another reason for leniency in this loan is that they do not have any proceeds from the sale of a prior purchase to put toward down-payment either. This means, VA loans let borrowers buy home for zero money down whereas other loans may require anywhere from 3.5 to 20 percent cash upfront.
VA home loans have less stringent guidelines for borrowers as well. There is no private mortgage insurance to pay which is not required in the first place. This is another reason why veterans prefer VA loans over other types of mortgage programs. Most other mortgage loans also require monthly PMI from borrowers who have paid less than 20 percent cash down. The absence of PMI in VA loans makes it more favorable besides saving thousands of dollars at the same time.
For a veteran first-time buyer of home and other real estate properties, establishing a credit is a major and in many cases an impossible step in life. Conventional home loan programs require good credit and qualifications in order to obtain loan. VA loans, on the other hand, have more relaxed rules and terms than conventional mortgages. First-time home buyers who are qualified veterans are sure to obtain the loan even with a shorter credit history from firms like Flagship Financial. The lender, however, will make sure to gauge the ability of the borrower to repay the loan or decide whether the potential borrower is at a credit risk. Whether or not a military member is qualified for the loan is determined by many factors including but not limited to residual income and debt-to-income ratio.
First-time home buyers may also qualify for the lowest VA funding fee. Disabled vets and surviving spouses maybe exempt from this fee as well. Other VA loan borrowers will pay around 2.15 percent of the loan value. Many veterans, in fact appreciate the help they can get out of these and other programs meant for them through the Department of Veterans Affairs. For them, these programs are the surefire way to save money and ease financial situations. The money obtained can also be used for purchasing secondary homes, paying moving cost expenses, or putting toward home improvement projects, college fees or funding retirement accounts in some cases.