VA loans are provided to members of the armed forces. VA home loans in Texas and other parts of the country are guaranteed by the Department of Veteran Affairs. These loans can be used to purchase different types of properties including single-family homes and condominiums. There are many benefits of these loans. VA loan rates in Texas and other parts of the country are lower than their conventional counterparts, which helps save more. VA loans have been around for quite some time now, however, there are still some myths about them doing rounds in the market. The purpose of the post is to debunk some of these misconceptions. Keep reading to learn more.
1. VA loan is no better than any other conventional loan on the market
Many borrowers and critics rubbish VA loans as just any other loan. The fact, however, is that VA loans come with a bundle of benefits. Qualified buyers, for instance, can borrow more than $400,000 in several locations without making a down payment. VA loan borrowers do not have to pay mortgage insurance; a benefit that can help them save up to $200 per month. Other benefits include low interest rates and a cap on lender closing costs.
2. Borrowers with a bad credit score do not qualify
The VA does not have any minimum credit score requirements for borrowers, however, many lenders would be more willing to lend to borrowers with a FICO credit score of 620 or more, which is significantly lower than what many conventional loans require (a credit score of 660 or more). For borrowers who have filed bankruptcy recently, VA loans have a shorter waiting time as compared to conventional loans.
3. VA loans have long closing time
Many borrowers wrongly belief that the moment they apply for a VA loan they would have to wade through bureaucracy and lengthy paperwork, which can result in agonisingly long closing time. The fact, however, is that with a closing time of 40-50 days, VA loans, in many cases close earlier than conventional loans. Studies also show that VA loans are more likely to close than other loans.
4. VA loan can be availed only once
VA loan is not a one time benefit and qualifying veterans can use the VA Loan Guarantee Program multiple times. Even veterans who are facing foreclosure can be eligible.
Sum up
VA loan was created in 1944 and has been around for quite some time now, however, still one in three veterans do not know about this benefit. Many others do not have full info about the loan. If you are a veteran looking for a home loan, do not let these myths shroud your judgement and talk to a mortgage consultant to know the loan best suited for your situation.
