Most home loan programs require money down when you obtain them, but do VA loans require money down? VA loans offer a guarantee from the Department of Veterans Affairs to lenders if borrowers default and anyone with the right military experience can apply for one. Will you need cash down, though? While you can buy a house with a VA loan without any cash, there are benefits of putting money down. Here are several things to understand about VA loans and the down payment requirements.
You Can Get One with No Money Down
One of the top reasons people pursue VA loans is for the no down payment requirement. If you have the right credit score and military experience, you can buy a house with a VA loan without one dime down. Most loan programs do not offer zero-money down loans, but VA loans do. If you get an FHA loan, for example, you will likely need 3.5% down. You can use a VA loan, though, without putting any money down on your purchase, as you can finance 100% of a home purchase through this loan type.
The Funding Fee You Must Pay with a VA Loan
Every loan program has fees that you must pay, including VA loans. With a VA loan, you must pay a funding fee when you buy a house with this loan type. You only pay the funding fee once, and the percentage varies. If you do not put any money down, you will pay a funding fee of 2.3% of the home's purchase price. The fee goes directly to the VA to help them continue providing these loans to those who qualify. You can roll this fee into your loan, which means you will not have to pay it out of your pocket when taking the mortgage.
The Perks of Putting Money Down on a VA Loan
If you can put at least 5% down on your house purchase, you can receive a few perks. First, your funding fee will drop to 1.65%. Secondly, putting money down reduces your loan balance, which also reduces your monthly mortgage payments.
You can buy a house with a VA loan with absolutely no money down. However, as you can see, it is beneficial to put some money down when buying a house. To learn more about VA loans and other options, talk to a local mortgage lender.
For more information, contact a company like Dominion Capital Mortgage.
Hello, my name is Sigmond Jenner. Welcome. I am here to talk to you all about acquiring personal loans for emergency expenses. Although everyone should have an emergency fund in a savings account, there are many barriers to achieving that goal. In the meantime, you can look into acquiring a loan to cover emergency expenses that may come up. You should be prepared ahead of time, so you can act fast when unexpected financial expenses arise. I will provide information you can use to prepare yourself for this process. Please come back again anytime to learn more about acquiring loans as needed.