VA Home Loan Advantages & Requirements

VA home loans differ from traditional mortgage loans in several key ways. Lenders make special conditions for those who have faithfully served the United States and their spouses. Qualifying borrowers can receive benefits unique to military service people.

Let’s take a closer look at some notable VA home loan advantages, and the requirements you’ll have to meet.

Advantages of a VA Home Loan

The potential benefits of a VA home loan are substantial. They can offer relief for new and current service members struggling to care for their families.

Zero Down Payment

The primary advantage military personnel most cite for VA home loans is the upfront cost, or, rather, the lack of it. Other mortgage programs involve a down payment between 2% and 5% of the overall price. With VA home loans, there’s no down payment at all.

Better Interest Rates

Mortgage lenders earn their money from interest rates. Current rates are between 6% and 7%, depending on the term length and price. VA home lenders generally offer rates 0.5–1% lower than other loans. That means veterans can save tens of thousands of dollars on this reduction alone.

No Need for Private Insurance

Homeowners are typically required to pay for private mortgage insurance in case of default. VA home loans, however, don’t require private insurance, resulting in even more long-term savings.

Easier Credit Requirements

Credit score trumps all other lending mechanisms these days, but military personnel don’t have to have a blemish-free credit report to qualify for a VA home loan — far from it.The bottom line differs from lender to lender, but veterans can expect lower credit requirements on average.

More Cost Savings

With a VA home loan, you’ll avoid some overlooked mortgage fees and associated expenses. These include high closing costs, penalties for prepayment, refinancing costs, and more.

Variety of Loan Types

VA home loans aren’t a one-size-fits-all proposition. Veterans can line up financing for home purchases, interest rate reductions, and even investments in energy efficiency. And there are no hard-set limits on how much veterans can borrow.

VA Home Loan Requirements

For those currently in the military, the main requirement is easy. If you’ve served at least 90 consecutive days in the Army, Navy, Air Force, Marines, Coast Guard, Space Force, or other qualified branches, you’re eligible for a VA home loan.

If you’re a veteran, your eligibility will depend on when and how long you served. Any former service members who enlisted after August 1990 must fulfill one of the following requirements:

• At least 24 months of continuous service
• At least 90 uninterrupted days of active duty
• 90 days of service if you were discharged for difficulties or personnel reduction
• Less than 90 days of service if you were discharged for disabilities caused by service

Veterans who served before 1990 have slightly different requirements. These are based on the time they served and usually correspond to past conflicts (World War II, Vietnam, etc.). Check with your lender to learn more.

Learn More About VA Home Loans from The Selby Team

If you’re in a position to take advantage of VA home loan benefits, we can help. Contact The Selby Team to get started on finding your new home.