If you have the option of using a VA Loan you should. Here are some great reasons why.
0% Down Payment
This is the greatest benefit of the VA Mortgage. NO MONEY DOWN. Nearly all VA home loans are used with zero down payment from the veteran.
Interest Rates Without the add ons
VA interest rates are more competitive than conventional loan programs. In fact they are much lower when compared to conventional loans with 5% down.
Example. A 30 yr. Interest rate with 5% down on a 200k loan might be around 4% while a similar VA rate about .5% lower. To get a conventional rate down to 3.5% might require a 20% down payment or credit of 740 or above
VA funding Fee Vs Private Mortgage Insurance
VA loans require no monthly mortgage insurance premium which will increase the monthly payment and can seriously impact qualifying. Using the same example from before, on a 30 year 5% down 200k mortgage, Mortgage Insurance premium can add another $165 to the monthly payment.
Cash out Refinance up to 100% of value may be used on existing Liens which are VA, conventional, FHA or Home equity loans.
Multiple Benefit Usage
The Veteran can use the home loan entitlement more than once. A VA Loan can be used to buy a home with no money down, sell the home and buy another with no money down as long as the previous VA Loan was paid off during the sale.
VA loans can be assumed by someone else who wishes to buy your home. There is an assumption fee the new borrower must pay and the VA must approve the transfer but its an awesome feature. especially in todays interest rate environment.
Example. purchase a home today at 3.75% and five years from now interest rates are 6% A buyer would want that lower interest rate! VA loan allows them to take it over.
These are several of the reasons why a person should take advantage of a VA Loan. If you have any additional questions or if you are thinking about buying contact me. If you would like to search the most accurate list of Chicagoland homes for sale click here.