VA Mortgage
A VA mortgage, also known as a VA loan, is a type of mortgage loan that is guaranteed by the U.S. Department of Veterans Affairs (VA). VA loans are designed to help active-duty military members, veterans, and eligible surviving spouses buy, refinance, or improve homes.
One of the main benefits of a VA loan is that it allows eligible borrowers to buy a home with no down payment, which can be a significant financial advantage. This means that borrowers can finance 100% of the purchase price of the home. However, there are limits on the loan amount, and borrowers may need to pay a funding fee, which is a one-time fee that can be rolled into the loan amount.
Another advantage of VA loans is that they do not require mortgage insurance, which can save borrowers money on their monthly payments. VA loans also have more relaxed credit score requirements than conventional loans, and borrowers may be able to qualify with a lower credit score.
VA loans can be used to purchase a variety of types of homes, including single-family homes, townhouses, and condominiums. They can also be used to refinance an existing mortgage or to finance the purchase and renovation of a home through the VA’s Home Improvement Program.
To be eligible for a VA loan, a borrower must be an active-duty member of the military, a veteran, or an eligible surviving spouse. Borrowers must also meet certain service requirements, such as a minimum length of service or discharge status. VA loans are offered by private lenders, such as banks and mortgage companies, but the VA guarantees a portion of the loan, which can make it easier for eligible borrowers to qualify for a loan with favorable terms.