Last week we discussed the challenges our educators are having getting into a new home, this week I want to focus the discussion on our brave veterans. Similar to those for teachers, there are programs to help our Vets.
Down Payment Assistance
As with most programs, they are designed to help with one of the biggest issues for Vets and other first time homebuyers: the down payment. With conventional loans, Veterans can get away with only making a 5 percent down payment. However, with a down payment of anything less than 20 percent then the home buyer would have to pay private mortgage insurance. In order for an individual to purchase a $500,000 home, they would have to make a $100,000 down payment. The Veteran can likely then afford the monthly payment, there is little chance that they have $100,000 lying around.
VA loan programs are designed to help with this issue as they offer zero percent down payment options. With a new home purchase loan or a cash-out refinance, Vets would still have to cover any closing costs although some loans allow you to roll this into the loan. An additional advantage of such programs is that the VA loan program does not ever require any mortgage insurance, which helps keep their the mortgage payments lower. Despite such, there is a VA funding fee that is paid in advance. This charge maybe waived for service members with service-related disabilities.
Lower Interest Rates
Beyond the down payment, VA loans have another benefit. They have lower interest rates, usually lower than conventional loans. This can turn into thousands of dollars in savings. Thus, the following are the main benefits of VA programs:
- No down payment
- Lower interest rates
- No Mortgage Insurance
- Closing costs can be included in the total loan amount
The Laura Wucher Team appreciate our Veterans and love to help them find the homes of their dreams. Contact us today to schedule your free consultation.