The VA loan program was introduced to help the US veterans fulfill their dreams of buying a home. As the program offers several benefits over conventional and other government backed home loan programs, it is one of the most popular home loans among borrowers. While the VA loan offers several advantages, there are various disadvantages associated with VA loans, too. It is, therefore, important for you to weigh the pros and cons of VA loans before you go apply for a VA home loan to buy a home in Texas or anywhere in the US. Come, let’s take a look at what they are. Pros of VA loans 1. Zero Down Payment Most home buyers procrastinate their home buying decision because of lack of funds required to pay the down payment. One of the key benefits of obtaining a VA home loan is that the borrower doesn’t have to pay a down payment. 2. Closing Cost Benefits Most home loan programs require homebuyers to pay the closing costs that comes as an additional burden for home buyers VA loan program allows sellers to pay a part of the closing cost on behalf of the veteran home buyers. 3. Low Interest Rates Interest rate is one of the most important factors that help home buyers determine the home loan they must obtain. VA loans offer lower interest rates as compared to what most home loan programs offer. Cons of VA loans 1. Funding Fee VA loan borrowers are required to pay an upfront funding fee of 2.15 percent if they are obtaining a VA loan for the first time, and 3.3 percent if they have taken a VA loan earlier. 2. VA Non-allowable Costs The VA loan program does not allow a buyer to pay the non-allowable costs. These costs have to be borne by the seller. Though these costs are only 1 percent of closing costs, it can be hard to convince a seller to pay these costs during a sellers’ market. 3. Terms of Usage VA loan program does not provide loans for buying a second home or for making an investment. The borrower or their dependents are expected to occupy the property within 6 months from the date of purchase. Last Few Words VA loan is undoubtedly one of the best home loan options available to veteran borrowers. However, if there are any home loan restrictions around VA loans that are discouraging you from obtaining a VA home loan, it’s advisable to consult a home loan officer who can help you decide whether you should go with a VA loan or any other home loan option.
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AuthorDarrick encourages readers to post issues that need immediate attention in terms of home buying; such interactions will enhance reader engagement and provide a road-map for others Archives
November 2017
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