The Pros of Using VA Loans for Homeownership in El Cajon
T
he VA loans became known in 1944 through the original Servicemen’s Readjustment Act. This act was signed into law by the then-president Franklin D. Roosevelt and provided veterans with a federally insured home with no down payment. The government made such an arrangement was made to provide housing and help to the veterans and their families. More than any other program in history, the Servicemen’s Readjustment Act helped improve the welfare of the veterans and their families, helping in the economy’s growth. The VA loan is a mortgage loan made available through a program established by the United States under the Department of Veterans Affairs. Just as the name suggests, VA loans assist service members, veterans, and eligible spouses to own a home. The VA sets everything from the qualifying standards, mortgage terms, and a portion of the loan. These loans are provided by private lenders. For the vast majority of military borrowers, VA loans represent the most powerful lending program on the market. A VA loan is a down payment-free mortgage option issued by private lenders and partially insured by the Department of Veterans Affairs (VA). This flexible, $0down payment mortgage has helped more than 24 million service members become homeowners since 1944. At the same time, most eligible Veterans often bypass this homebuyer assistance program for various reasons such as lack of knowledge of its advantages and the notion of thinking the program involves a tedious process. Moreover, even most real estate agents and lenders lack a deep understanding of the program’s unique benefits and quirks. Whether you fall under these categories or not, take a few minutes to read the below facts about VA loans.
WHAT MAKES VA LOANS SPECIAL NO DOWN PAYMENT OR MORTGAGE INSURANCE IS REQUIRED. Did you know that you do not need to put down anything to get approved for a VA mortgage loan? While most mortgage programs such as FHA and Conventional loans require between 3%-5% down payment, VA loans require zero down payment. Moreover, with a VA loan, you get to avoid steep mortgage insurance fees, whereas private mortgage insurance (PMI) costs $150 per month on a $250,000 home. Consequently, with a VA loan, you can buy a home almost immediately, rather than having to save for years for a down payment. Also, by eliminating PMI, a buyer using a VA loan can afford a home worth $30,000 more with the same monthly payment. This means that VA loans save you money while tremendously increasing your buying power. VA LOAN BENEFITS ARE REUSABLE. The benefits that come with a VA loan are not one-and-done. You can use them as many times as possible as long as you pay off the loan each time you JUNE 2022 | 115
PHOTOS FROM 123RF
By John Costigan
