In no particular order, these are my top reasons for using the VA loan:

• Zero Down
• No Private Mortgage Insurance
• Competitive Interest Rate
• Favorable Lending Standards

Zero Down- Yes, you can literally buy a home with a VA loan without putting money down towards your mortgage.  Most other loans programs require 5%-20% down.  This does NOT mean that there may not be money required up front.  I always advise my clients to expect to pay about $500 for their home inspection, and to have a $500-$2000 for earnest money (reimbursed to you at closing).

No Private Mortgage Insurance- Unless you’re using a traditional mortgage and putting 20% down, you’re going to pay private mortgage insurance (PMI).  PMI is insurance you pay guarantying you’ll pay the mortgage.  Well, the VA loan is backed by Uncle Sam, so with the VA loan, you do not pay PMI.  Though PMI is based on a variety of factors, on a $250,000 mortgage, you can expect to pay about $240 each month for PMI.

Competitive Interest Rate- As I write this, the VA home loan interest rate is 3.75%.  The 30-year conventional rate is 4.125%.  That may not seem that significant, but that equals $56 a month…every month…for 30 years.  You’ve worked hard for your money, don’t give the bank free money.

Favorable Lending Standards- With qualifying credits scores less than the number of calories in a Whopper, I’d say the VA loan has pretty relaxed standards.  And with the money you saved on PMI, you can buy 13 whoppers a month…though I wouldn’t advise that.

As always, thank you for your service,

Brad Williams

Military Relocation Professional

Hoekstra & Reiss | Edina Realty

612-408-1953 | bradwilliams@edinarealty.com