VA Loan Benefits
VA loans are mortgage loans backed by the Department of Veterans Affairs, available to eligible veterans, active-duty service members, and some surviving spouses. VA loans offer exceptional benefits: no down payment required, no private mortgage insurance (PMI), competitive interest rates typically 0.25-0.5% lower than conventional loans, and lenient credit requirements.
The VA doesn't actually lend money - they guarantee a portion of the loan, encouraging private lenders to offer favorable terms. This guarantee allows 100% financing without PMI, which can save hundreds monthly compared to conventional loans with low down payments. Over 30 years, eliminating PMI alone saves $50,000-80,000.
VA loans do charge a one-time funding fee (typically 2.15% for first-time use with 0% down, 3.3% for subsequent use) to help sustain the program. This fee can be rolled into the loan. Disabled veterans and surviving spouses are often exempt. Despite the funding fee, VA loans typically cost less overall than FHA or conventional loans with low down payments due to no PMI and better rates.
Quick Tips
- Always compare APR, not just interest rates
- Use the Rule of 72 to estimate doubling time
- Extra payments dramatically reduce total interest
Frequently Asked Questions
Veterans with 90+ days active duty during wartime, 181+ days during peacetime, 6+ years National Guard/Reserves, or surviving spouses of service members who died from service-related causes. Obtain Certificate of Eligibility from VA.
Yes, your entitlement restores after you sell the home and pay off the loan. You can also use remaining entitlement to buy another home before selling the first, subject to entitlement limits.
A one-time fee (typically 2.15-3.3% of loan amount) charged to help sustain the VA loan program. It can be rolled into the loan. Disabled veterans and some surviving spouses are exempt.
As of 2020, no limits for veterans with full entitlement. Previously limited to $484,350 in most areas. Veterans with partial entitlement or seeking to use remaining entitlement on a second property still have limits.
No, VA loans must be for primary residence. You must certify you'll occupy the home. However, you can buy a multi-unit property (up to 4 units) if you live in one unit.