DENVER – The U.S. Department of Veterans Affairs provides wide-ranging benefits to the men and women who serve our country, but one of those benefits – the VA-guaranteed home loan – is used far less frequently than most of the others.
According to a 2014 survey of Iraq and Afghanistan combat veterans, only 36 percent of veterans have taken advantage of housing benefits available to them. By comparison, 67 percent reported taking advantage of education benefits and 68 percent used health benefits.
With a VA-backed loan, veterans can go through a traditional mortgage lender, but the VA guarantees a portion of the home loan, allowing the lender to offer better terms than they would with a traditional mortgage.
That means a buyer can get into a home with no down payment in most cases. VA-backed loans also are much easier to qualify for, with less stringent credit score and debt-to-income ratio requirements.
And unlike other loans with low or no down payments, VA loans don’t require mortgage insurance. That means a lower monthly payment and savings, on average, of $40,000 over the course of the loan, according to Marni McMillan with VIP Mortgage.
“It’s a fantastic benefit to those who have served,” McMillan said.
McMillan said many veterans may not take advantage of the VA loan program because they don’t realize that it removes some of the obstacles to home ownership, such as coming up with a down payment.
“A lot of people are aware they have a benefit there but don’t fully understand what it is,” she said. “Generally, with a VA loan, their borrowing power is much greater.”
VA loans are open to veterans who meet length of service requirements, active duty service members, some reservists and National Guard members and some surviving spouses of dead veterans.
If you already own a home, a VA loan can be used to refinance your existing mortgage and because the benefit can be reused, veterans can continue to save money when they move or buy additional homes.
“There’s really no reason not to do it,” McMillan said.
For more information on how to get a VA loan, talk to a mortgage lender or log on to benefits.va.gov.