No Down Payment Requirement on VA Loans

Obviously this is a big factor for those who don’t have the money to put down on a mortgage loan. Conventional loans require 5% down payment which can certainly add up quickly the larger the home you look to purchase.

VA Loans Don’t Have PMI

This can lower your payment significantly compared to the high priced PMI charged on conventional loans and also make it easier to qualify for a loan as your debt to income ratios will be lower.

Lower Credit Requirements for VA Loans

This is a huge benefit vs the conventional loan. A customer can get approved for a VA loan with a credit score as low as 620. In most cases, customers looking for conventional loans will have to look for a different product if their credit score drops below 660 and in some cases, 680.

Higher Debt to Income Ceilings on VA Loans

This too is a tremendous benefit for Veterans and current military who might not be able to show a significant monthly income to qualify. Conventional loans, in most cases, will deny the borrower that has a total debt to income ratio of over 45%. This ratio is figured by taking the TOTAL MONTHLY DEBTS including property tax, home owner’s insurance, home association dues and minimum non-mortgage debt payments, and dividing it by the TOTAL GROSS MONTHLY INCOME.

So on a conventional loan payment of $1,100 (Principal and Interest), Monthly tax and insurance of $400, PMI payment of $100 and total monthly debt payments of $400, your total monthly payments would be $2,000. For a conventional loan, your monthly gross income could not be less than $4,444.44 or $53,333 per year. However, on a VA loan, your income could be as low as $3,333.33 or $40,000 per year and qualify for the same loan.

VA Loans Are Assumable

This is a tremendous benefit for Veterans looking to sell their home. The buyer can literally have a rate lower than the market rates making purchasing the house much more attractive. You can see how this would help sell your house in a tough market and gain an advantage over some other homes in your area.

No Lender Fees

If you fill out an Inquiry Form Here, you’ll be connected to a VA Mortgage Specialist that will charge you Zero Fees for your VA loan. That means NO Bank Fees, NO Broker Fees, NO Processing Fees, NO Underwriting Fees and especially NO ORIGINATION FEES.

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You’re not alone…and it’s not the only choice you have.

What most veterans don’t realize, on July 30, 2008, the President signed the Housing and Economic Recovery Act of 2008 which allows for a “Temporary Increase in Maximum Loan Guaranty Amount for Certain Housing Loans Guaranteed by the Secretary of Veterans Affairs.” As of 2010, this increase is still available, but no one knows for how long, which is the reason why I underline “Temporary”.

Basically, in short, veterans and current military personnel can get a zero down VA Loan over $417,000 in certain High Cost Counties around the United States. In fact, in some counties, you can actually get a zero down jumbo VA loan amount up to $1,094,625 and still with NO mortgage insurance!

Yet there are still so many veterans not taking advantage of this benefit they earned. Either they don’t know about it, they are working with a broker that doesn’t have much experience with VA loans (very common) or they are working with a broker that is not able to offer them (also very common).

With FHA’s mortgage insurance and Jumbo Conforming Private Mortgage Insurance “PMI”, if you are a veteran, VA Jumbo Loans should really be your only choice if you are looking to put less than 20% down.

Lastly, a common mistake made by veterans is to go with a broker they know, a realtor referral or simply, not do enough research. This could be a very costly mistake. Everyone knows that VA allows lenders to charge a 1% Origination fee. Of course, this can make a VA loan very pricey and often times deter the veteran from using their VA eligibility and taking advantage of the many benefits a VA Loan offers.

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