VA mortgage loans are one of the best and most favorably termed loans in today’s market. These loans are one of the greatest ‘perks’ of military service to our men and women and a well-deserved reward at that. A VA mortgage loan is a loan that is given by almost any lending institution in the country and is ‘guaranteed’ by the Department of Veteran’s Affairs and because of this use payday loans in wellington to take care of those unexpected expenses are great in sense of saving our effort made money. What it does is offer qualifying veterans who are either currently serving in a military capacity or have been honorably discharged from military service receive special options when financing their homes.
There are many benefits that are worthy of note with VA mortgage loans. The very first benefit that comes to mind is the fact that not only are you not required to make a down payment, your interest rate does not suffer as a result of your electing to do so. Most conventional loans allow for a no down payment option but there is a penalty for that in the fact that the interest rate is typically higher if you choose this option. With VA mortgage loans, this is not the case and it is definitely a great thing when it comes to how much money you will save throughout the course of your loan.
The second benefit also affects your interest rate. VA mortgage loans often have the lowest interest rates on the market. Now, your interest rate is affected by your credit and you must prove credit worthiness in order to get one of these loans but whatever your current level of credit is, you will probably find the best possible interest rates with a VA loan. Interest is where the lending institutions make their money for loaning you yours, and you will find that it is the costliest aspect of owning a home. However, if you can lower your interest rate by one or two points the savings will be phenomenal.
One of my favorite benefits about VA mortgage loans has to do with Private mortgage insurance. Since the VA is guaranteeing 25% of your loan, this works as a 20% down payment as far as the requirement for private mortgage insurance is concerned. While it may not seem like much this alone can save you thousands of dollars early in the loan process when you are paying most of your payments to interest rather than principal. If you take the $50 to $100 you would be paying in private mortgage insurance each month and invest that in the principal of your loan the savings over the life of your loan and the length of your loan repayment will be drastic and astonishing.
If you qualify as veteran and have decent credit you really should put serious consideration into applying for one of the VA mortgage loans as a first mortgage or even as an option for refinancing your existing mortgage, you might find that the money you will save can buy a nice car or vacation home later in life.