For most of our veteran clients, VA financing is the best possible way for them to get into a home. Where else is a borrower going to find financing that requires no down payment, no PMI and low interest rates? We don’t know of any.
If you can purchase a home in Colorado right now, taking a good look at a VA loan if you are a veteran or active duty service member just makes sense. The benefits are designed primarily to enable military personnel and veterans become homeowners at an affordable cost with far more leniency in qualifying criteria.
Benefits of VA Loans
Let’s look at some important benefits of a VA mortgage.
- VA loans are guaranteed by the federal government — What does this mean? If you are unable to fulfill your obligation under the terms of the loan, the government guarantees the lender a certain portion of that loan will be repaid. That takes away much of the risk for a lender which is why you can get a better rate and terms than a mortgage without that type of federal guarantee.
- You can still shop for the best rates — The Veterans Administration doesn’t make the loan. They guarantee it. VA mortgages are made by individual lenders and can vary in rates and fees. That means that you can still shop for the best possible scenario for your budget.
- No down payment is required with a VA loan — Other mortgage programs require that you make a down payment toward the purchase of your home. A VA mortgage does not. Under VA guidelines, you can finance a full 100 percent of the purchase price of the home.
- No mortgage insurance is required — For any other loan product that is more than 80 percent loan-to-value, a lender will require the borrower to purchase PMI (private mortgage insurance) to offset the risk to that lender. A borrower will then make monthly premium payments on this PMI which increases monthly expenditures. VA loans require no PMI which can make them more affordable in the long run.
- Easier qualifications — All mortgages require that a borrower show that they have a credit-worthy credit score, can afford to make monthly payments and have had a responsible history of paying things on time. VA mortgages are not as stringent in the qualification arena and tend to be more lenient.
- Lower closing costs — VA requirements limit closing costs that can be charged to a borrower.
- VA loans are assumable — When you go to sell your home, the buyer can assume your mortgage if they are also VA-eligible. This is an added benefit to consider for the future, especially with today’s low interest rates.
- VA loans offer many different options — Just like other mortgage products, VA loans offer both fixed-rate and adjustable-rate options and can finance many different types of properties.
- VA loans can be used to refinance your existing mortgage — If you are considering a mortgage refinance and you are eligible, it can be the perfect mortgage to consider right now.
Apply for a VA Loan with Front Range Mortgage
If you are VA-eligible, here at Front Range Mortgage, we can go through your options for VA mortgage funding for either a new home purchase or a refinance. We are licensed Colorado mortgage brokers serving Denver Metro, Colorado Springs, Grand Junction, the Western Slope and throughout the entire state. We would be glad to discuss VA lending with you.