Advertorial – Sponsored content from Veterans United.
If you’re in the market for a home loan but lack the funds for a down payment, consider getting a mortgage backed by the Department of Veterans Affairs.
Commonly known as VA loans, and available through lenders across the nation, these mortgages are a powerful financing option for active military and veterans.
Best of all, they require no money down to purchase a home.
That means you don’t have to spend years saving for a down payment—you can finance 100 percent of the purchase and buy now.
Comparison shop for a VA loan today.
How much you’ll save on a down payment
You can save thousands of dollars upfront by going with the VA loan option.
For example, in 2016, the average VA loan amount for purchases was $253,000.
If you buy a $253,000 home with a conventional loan, your down payment would typically be at least $12,650, or 5 percent of the loan amount.
Even if you get an FHA loan, which requires at least 3.5 percent down, you would have to make a minimum down payment of $8,855.
Those aren’t small sums. But with a VA loan, you can skip the down payment all together and keep more money in your pocket.
The added benefit of no mortgage insurance
Along with saving money on a down payment, VA loans don’t charge mortgage insurance.
To avoid paying private mortgage insurance with a conventional loan, you typically have to put down 20 percent of the loan amount, or $50,600 on a $253,000 loan.
And if you decide to put down less and pay mortgage insurance, it quickly adds up.
For conventional loans, mortgage insurance can easily be $80 or more per month on top of your monthly payment.
FHA borrowers face both upfront and annual mortgage insurance charges.
On a $253,000 loan, the FHA mortgage insurance premium can easily add $175 on top of a monthly payment —and FHA borrowers pay that cost for the life of the loan.
When you combine the VA loan’s benefits of no mortgage insurance and no down payment, you can save a significant amount of money. That’s something that’s hard to find outside of the VA loan program.
Comparison shop for a VA loan today.
Why VA loans don’t require a down payment
VA loans are guaranteed by the Department of Veterans Affairs. So as long as lenders follow the VA guidelines, a piece of the loan is backed by the government.
If you happen to default on the loan, the government will pay the lender for at least a portion of the loss.
The VA loan guarantee limit varies by location. You can check loan limits at the U.S. Department of Veterans Affairs.
Where to apply
With its no-down-payment financing option, no mortgage insurance, flexible credit standards and low closing costs, the VA loan isn’t something you want to pass up.
Apply now to start enjoying home ownership and all of the perks that VA loans have to offer.
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