By Joe L. Fisher
The Pros and Cons of VA Homeownership for veterans
T
he demand for VA home loans has recently been on the rise as many service members faced with tough credit and down payment requirements choose VA loans as their suitable home financing option. We cannot hide or deny the extreme attractiveness of VA loans, especially for veterans. In 2020, the number of military members who took advantage of the VA loan programs was reported to have expanded rapidly. According to Forbes, more VA-backed loans originated in 2020 than in the two previous fiscal years combined, totaling more than 1.2 million loans.
Pros of VA home loans. To begin with, VA-backed or VA home loans require no down payment. This means that eligible borrowers can borrow as much as the lender is willing to give without putting a penny down. How does this happen? When the VA backs a loan, it means they insure a part of the loan. This means that in case you default, the VA covers the portion they had insured. This gives lenders more confidence, and in return, they’re able to offer more favorable terms such as no down payment to eligible borrowers.
However, as with any loan option or anything else in this world, VA home loans have their pros and cons. It’s just part of the game. It’s best that you remain aware of these pros and cons if you’re to make an informed decision. Let’s have a look.
VA home loans also require no private mortgage insurance (PMI) from eligible borrowers. This is simply because the Department of Veteran Affairs or VA insures home loans to eligible veteran borrowers. Normally, PMI is required for
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