VA loans are designed to help veterans and their families better afford housing options. There are many benefits of applying for the VA loan program. If you’re interested in learning more, here is a quick explainer on everything you need to know about VA loans for veterans.
What Is a VA Loan?
A VA loan is a mortgage that allows eligible U.S. veterans to borrow money to purchase a home. Veterans can use this loan to purchase a home with no money down.
The primary benefit of the VA loan is that it does not have a down payment requirement. Typically, for a conventional mortgage, the borrower is required to submit 20 percent of the home’s purchase price as a down payment. This is not the case with a VA loan.
Who’s Eligible for a VA Loan?
There are some eligibility requirements for VA loans. In order to be eligible for a VA loan, you must meet the following conditions:
- You must have served in the U.S. military
- You must have a current active VA loan entitlement
- You must have served a minimum of 90 days of active duty during wartime or 181 days of active duty during peacetime
What Are the Benefits of a VA Loan?
1) Disability Benefits
Veterans who are disabled and unable to work may be eligible to receive disability benefits from the VA. The amount the VA will pay you is dependent upon the disability rating you receive from the VA.
The VA disability benefits are a tax-free source of income. Since the VA disability benefits are tax-free, you can use the VA disability payments to supplement your monthly income for your mortgage payments.
You can also use your VA disability benefits to help you with your down payment on your home.
2) Loan Grants
The VA offers a loan grant program to eligible veterans. The loan amount from the VA is typically less than the total cost of the home, which means that you will need to finance the remainder of the home through a conventional lender.
Loan grants are available for veterans who use the VA loan program to purchase a home.
3) Tax Exemptions and Credit
If you qualify for a VA loan, then you are eligible for several tax exemptions and credits. You can deduct the amount of your mortgage interest and property taxes from your taxable income.
VA loans are also exempt from state and local transfer taxes. This means that you will not pay any additional fees when you buy or sell your home.
4) No Down Payments
If you qualify for the VA loan program, then you are exempt from making a down payment. This is a benefit of the VA loan program because it lowers the bar for entry into homeownership.
In order to qualify for a conventional mortgage, you will be required to make a down payment equal to 20 percent of the home’s purchase price. This is not the case with a VA loan.
If you qualify for the VA loan program, then you will not be required to make a down payment.
There are many benefits of applying for the VA loan program. If you are eligible, then you can buy a home with no money down.
Learn more about the VA loan program with Cross Timbers Mortgage. We provide mortgage training in Florida & Oklahoma to help you find a mortgage that best fits your financial needs. Consult with us today!