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VA Loans and the Benefits It Can Give To Veterans and Active Army Members

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Nowadays, VA loans are gaining popularity and have become a widely discussed topic. Even after this, there are not many people familiar about its eligibility conditions. Such loans are available exclusively to active armed forces members and veterans, who have served about 90 days or more during wartime, 181 active days during peacetime or about 6 years in Reserves.

Benefits of VA Loans

VA loans have multiple benefits which are discussed below.


  • No Down Payment Required

Such loans don’t require any down payment while purchasing property, thereby allowing people even without savings to buy a home. The minimum amount of down payment required for FHA loan is only 3.5 percent, while for a conventional financing it’s nothing more than 5 percent.

This amazing benefit of not requiring paying sum for down payment allows active military members and veterans to buy a home for their family without requiring them to save huge sum for down payment. You can visit Maureen Martin for getting a VA loan.

  • Lenient Credit Requirements

As many prospective homebuyers are aware of the fact that credit requirements have become more stringent from the lenders’ side. However, the score you require for a VA loan financing is well below what you require for a traditional mortgage.

At present, VA lenders generally prefer homebuyers with credit score not less than 620. On the other hand, for conventional mortgage, it’s about 740. Besides relaxed credit requirements, VA borrowers are legible for interest rates that are comparable to what a conventional mortgage borrower may obtain.

  • No Mortgage Insurance

Homebuyers looking for a FHA or conventional loan are typically required to put a sum of 20 percent of property’s purchase price as mortgage insurance. This is an additional payment which is charged on to the monthly installment of mortgage. This cost generally varies as per the loan sum and other related factors. However, usually the sum lies around $100 or more every month for mortgage insurance.

Conventional loans come both with an up-front insurance premium and annual charges that borrowers are required to pay throughout the loan’s life. On the other hand, VA loan borrowers are not required to pay such private insurance amounts, that save borrowers a good sum every month.

VA loans come with a VA finding fee, which is a fee applicable to all refinance and purchase loans. Borrowers having a service related disability are exempted from payment of this fee.

  • Flexible DTI Ratios

Irrespective of the loan program, you are required to maintain a balance between your monthly revolving debts and your monthly income, like a education loan payment or a mortgage payment. Lenders divide the two and then calculate the debt to income ratio of borrower.

In case, the figure matches with the threshold, the borrower is eligible for loan, while if it doesn’t he is not. For FHA or conventional loans, this ratio is around 36 percent while for VA loans, it’s 41 percent.

In certain cases, it’s possible to go up to 55% or so. This advantage provides veterans more space for financial breathing and makes it easier to qualify for the desired loan.

Author’s Bio:

This Guest Post has been written by Tony Callison. If you are also looking for a VA loan, there is no better option person to reach out to than Maureen Martin. She has more than 10 years of expertise in handling mortgage loans, and she can assist you in getting the best loan at reasonable cost.

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