VA Loans


What is a VA Loan?

Unlike conventional mortgage types like the 15 year or 30 year mortgages, the VA loan is only available to veterans and members of the United States military. These loans are guaranteed by the Department of veteran Affairs (VA) and requires low or no down payment.

VA Loan Benefits

VA loans are the most powerful home mortgage program on the market. Because these loans are government backed, they come with significant benefits for home ownership that veterans may otherwise not get anywhere else.

What are these benefits?

#1 Benefit – No down payment

Saving money and building credit may be difficult for service members to do while constantly on the move. The VA loan allows qualified service members to finance a house at 100% of the home’s value.

#2 Benefit – No private mortgage insurance

For traditional 15 or 30 year fixed rate mortgages, if your loan to value percentage is under 20%, you are required to purchase mortgage insurance until you obtain 20% value in your house. So PMI is to protect the lender in case the borrower defaults on the loan.  PMI typically ranges from $115 – $345 per month depending on the mortgage amount.

This isn’t the case with a VA loan. VA loans don’t require private mortgage insurance (PMI). This is because the federal government assumes the risk on behalf of the service person.

Because of this benefit, veterans can build equity in their homes quickly and essentially saving you thousands of dollars over the live of your mortgage.

#3 Low interest rates

All interest rates on mortgages are risk based. But when it comes to the VA loan and it being backed by the federal government, the financial institutions carry less risk and can offer substantial savings to veterans because of this.

VA loans are typically 0.5% to 1% lower than conventional 15 year or 30 year mortgages. Take a look at the following chart to see the incredible saving interest over the life of the mortgage.


VA Loan Qualifications

There are a couple restrictions for qualifying for a VA Loan. Such as:

  • You have served 90 consecutive days of active service during wartime
  • You have served 181 days of active service during peacetime
  • You have more than 6 years of service in the national guard or reserves
  • You are the spouse of a service member who has died in the line of duty or as a result of service-related disability

Frank Perea is a mortgage broker based out of Midland, Texas and serves clients all throughout eastern Texas including: Odessa Texas, Monahans Texas, Big Springs Texas among others.