Veterans Assistance Loan Advantages

Veterans Assistance (VA) financing is available for more than 29 million veterans in the United States. Though many veterans have previously used their loan benefits, they may still have remaining or restored loan entitlements that can be used to buy homes. Quickly consider some of the advantages provided by VA loans and it will be apparent quickly why they are important to so many veterans.

Most importantly, no down payment is necessary in most situations. The maximum loan may cover up to 100 percent of the VA-approved reasonable value of the home, though the loan generally cannot exceed $203,000. You will still be able to negotiate interest rates with your lender, and you won't have to worry about mortgage insurance premiums. VA loans place limits on your closing costs, and include an appraisal which will inform you of the value of the property you are considering.

VA loans are thirty year loans with a choice of repayment plans. You can opt for the traditional fixed payment, featuring constant principle and interest (property taxes and home insurance premiums may still fluctuate). You may also get an adjustable rate mortgage, allowing a lower initial interest rate and a higher loan amount. Yearly increases are limited to 1 percent, while there is a maximum 5 percent increase over the life of the entire loan. Graduated payment mortgages, which start low and gradually rise to a leveled payment plan in the sixth year, are also available. Finally, you can choose Growing Equity Mortgages, which feature gradually increasing payments that apply the increases to the principal, allowing you to own your home outright faster than ever.

Most loans on new houses require a one-year warranty from the houses builder that the home is built in conformity with VA-approved plan and specifications. The construction is expected periodically to ensure this conformity. VA mortgages are also assumable, provided that the VA approves the assumer's credit. There are also no penalties for early payments. Finally, VA offers counseling and for veterans to help them avoid losing their home when they experience temporary financial problems.