The Advantages of a VA Mortgage

By Melvin Richardson

For those who qualify for a VA loan there are advantages that provide opportunities to save money. It's a good idea to first see if you qualify, then contact a representative in order to receive more information. A VA loan is guaranteed by the Veterans Administration, which insures the lender from loss.

With a VA loan there is no down payment requirement, which helps to ease the burden of saving for a home. There also is no need for private mortgage insurance, or PMI, saving $25 to $100 per month for an average-price home.

The maximum amount for a VA loan is $729,000. With all of the other financial benefits you may be able to take on larger payments than you could have otherwise.

A VA loan is available for the surviving spouse of those who served in the armed forces and meet the qualifying guidelines, if she has not remarried.

If you want to receive a conventional loan the credit-granting criteria can be very strict. The income and credit requirements for a VA loan are less stringent.

VA loans allow you to receive low interest rates and you can pay a fee if you wish to receive an even lower rate. A low interest rate allows you to have a lower monthly payment and you can save thousands of dollars in finance charges over the life of the loan. VA loans do not have a prepayment penalty.

There is a funding fee, which can range from 0 percent to 3.3 percent, based on the total loan. There is no out-of-pocket expense because the funding fee can be financed by adding it to the total loan. This fee can be waived for veterans who are considered to be at least 10 percent disabled because of active military service. People who are required to pay the fee can make a down payment, which will lower their funding fee.

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