How Do VA Loans Work?

HomeBlogHow Do VA Loans Work?

If you are active-duty military, a veteran, or a surviving military spouse that is looking into purchasing a home, VA loans are available to help you make your dream of owning a home a reality. VA loans are home loans or mortgages that are backed by the Department of Veterans Affairs. These types of loans are designed to specifically support past and present military members so that they can purchase a home of their own. There are many benefits associated with VA loans, making them different from conventional mortgage options.

How Do VA Loans Work?

One of the biggest benefits of VA loans is that there is no down payment required. Being able to secure a home loan without a down payment makes purchasing a home more attainable, as down payments are often an obstacle to purchasing. VA loans also do not require private mortgage insurance, or PMI. Conventional home loans require PMI to be paid if the down payment is less than 20% of the value of the home. Paying PMI can be a big cost, so the savings here are substantial.

Other advantages offered by VA loans are competitive interest rates and more flexible credit score requirements. There are also options for refinancing and cash-out refinancing that can allow buyers to lower interest rates and access equity in their homes, something that otherwise may not have been available.

At Harbor Mortgage Company, our mortgage lending experts work to find appropriate VA loans for those who qualify in the Savannah, Georgia area. If you would like to discuss VA loans with our lending experts, give us a call.