How Veterans Home Loans are Superior to Conventional Mortgages
VA MORTGAGE VS CONVENTIONAL MORTGAGE
As you begin to search for a home loan, many conventional lenders may try to attract you with the promise of low interest rates and other incentives. However, these lenders will never be able to compete with the benefits of a Veterans home mortgage.
Conventional lending institutions must view every borrower as a potential risk. The higher the risk, the higher the interest rate, and the harder it will be to qualify. Many banks require a credit score well above 700 in order to receive a decent interest rate. Because VA loans are backed by the federal government, the risk factor is eliminated, and borrowers are not only approved, but banks will even compete to provide the most competitive interest rates possible. Veteran's mortgage borrowers also have the advantage of being able to pay off their loans at any time without any penalty.
VA Mortgage vs FHA Mortgage
While FHA loans are also government-backed loans, there are two primary ways in which VA loans are superior:
- No Down Payment - While VA mortgages do not require a down payment, FHA borrowers are responsible for a down payment of at least 3.5%.
- No Monthly Mortgage Insurance - FHA loan borrowers are generally responsible for both an upfront mortgage insurance premium, as well as a monthly insurance premium. VA mortgage rates are considerably lower because they do not include these fees.
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VA Mortgages have quite the benefits. Interested?
We understand that this is a lot of information to process. If you would like personal help to guide you through the steps of acquiring a VA home loan, USVM is glad to be of service. Contact us at 888-997-8786 to learn more about which options will work best for you. We would be honored to serve you!