If you are a military veteran or active duty member, you may have considered using a loan from the US Department of Veterans Affairs (or VA, for short) to purchase a home. You may be familiar with the good things about VA home loans, such as the fact that you don’t have to pay a down payment to use one. Credit score and income requirements for VA loans are often more flexible than what you might see for other types of mortgages. You also won’t have to pay for mortgage insurance (like the private mortgage insurance that comes with a conventional home loan if you put down less than 20%).
There is no doubt that these are all great benefits and a VA loan is well worth it if you qualify for a loan. However, there are four other benefits of these mortgages that you may not be aware of. Read on and discover even more VA loan benefits.
1. Surviving spouses may also be eligible
The first little known benefit of VA loans is that you can have one even if you are not a veteran or active duty member. If you were the spouse of a veteran who died in military service (Active, Reserve, or National Guard), or if you were declared totally disabled from service for a period of 10 years or more prior to death, or five or more years after active duty, you may qualify. There are a few other rules here; you may also qualify if your spouse is MIA (missing in action) or was/is a prisoner of war (POW). And if you remarried after age 57 and after December 16, 2003, but you were married to a military member who died in the line of duty or as a result of military service, it’s still a another way to qualify.
Regardless of the surviving spouse designation you fill out, you will also need to have or be eligible for Dependency and Compensation Allowance (DIC), which is a non-taxable monetary survivor benefit given to children, spouses and parents. of veterans.
2. No loan limit with full entitlement
You might be concerned about qualifying for a VA loan if you live in an expensive part of the country. The good news is that there is now no cost limit for a home purchased using a VA loan if you, as a veteran or service member, have a full entitlement or benefit. home loan. This means you are buying a home for the first time or no longer owning a property with a VA mortgage. (Before 2020, if you bought a home at a price that exceeded the conforming lending limits, you would have had to make a down payment on the portion of the price over that limit.) This does not mean that you will be approved by a lender to not any amount to buy a house, however. Lenders set their own rules regarding credit rating, income, and asset value when considering how much to lend a buyer.
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3. You can use a VA loan multiple times
As you may have analyzed in the section above, you are allowed to use a VA loan multiple times to purchase homes. There are a few rules here; you must be a first-time buyer or no longer own homes paid for with VA loans (these may be paid off or transferred to another qualified veteran or service member). You’ll need to apply to the VA to get your full rights back, and then you’ll be ready to buy another home with a VA loan!
4. No fees for repaying the loan early
Finally, unlike some types of home loans, you as the buyer will not be charged any fees if you want to make additional payments on your mortgage and pay off the loan early. Some lenders for conventional home loans and other types charge prepayment penalties, which is exactly what you don’t want if you’re trying to save money on interest by paying off your home loan early.
All in all, a VA home loan can be a great benefit for veterans or the military, thanks to both the more well-known benefits and the ones I’ve discussed above. You can find even more detailed information about all of these benefits on the VA’s website. Happy house hunting!
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