There are many types of loans that a person can look for when it comes time to buy a house. Many people choose a service like AMCAP Mortgage in order to find the right type of mortgage. A type of mortgage that is quite popular is a VA loan. This type of loan is only available to a specific group of people, however.
The first thing to understand is that a VA loan is available only to current and past military personnel. These mortgages have some very beneficial terms and advantages that make them an excellent option this group of people.
The first benefit is that interest rates are typically about a half percent less than what conventional mortgages are available for. While this might not seem like a big deal, over the span of a 30 year mortgage, a half of a percent can equate to a sizable amount of money saved, as opposed to going with higher rate conventional mortgages.
In addition to this, VA loans seldom require a down payment. If the home purchase is above the appraisal value, a small down payment may be required. In most cases, however, no down payment is required.
Many people focus on their credit worthiness when it comes to purchasing a home. With VA mortgages, there are no minimum credit score requirements in order to secure a mortgage to purchase a home. In addition, there is no mortgage insurance required, which can significantly lower monthly payments as well.
There are also limits on what the closing costs can be. This can offer big savings for a buyer. Anyone offering a VA loan knows that they have to stay within as certain price point when it comes to what they charge someone who wants to obtain this type of loan.
While not everyone can purchase a home through a VA loan, for those that can, there’s a tremendous benefit over other types of loans. From lower than average interest rates, no penalty for early repayment, no down payment needed, no credit score requirements and no mortgage insurance, these are all the types of incentives people should take advantage of if they have past or present military service. To learn more about these types of loans, you may want to visit texasvaloancenter.org.