15 Feb The Benefits of VA Loans
Veterans who serve our country deserve to have plenty given back to them for their service, and the mortgage industry helps lead the charge. A VA loan, reserved just for veterans or certain active service members, is a loan program with several highly beneficial elements that can’t be found in most conventional loans.
At City Creek Mortgage, we offer fixed rate VA loans with major refinancing benefits. Let’s find out about these and some of the other primary reasons veterans should take advantage of these loans if they’re able.
In most conventional loans, lenders expect a 20 percent down payment to kick things off. With most VA loans, though, including those from City Creek Mortgage, there is no down payment. This payment is usually to protect the lender from the risk of default, but because the federal government protects VA loans, there’s no need for this kind of speed bump.
Down these same lines, in a traditional loan situation, there are penalties if you’re unable to come up with the 20 percent down payment. This is typically in the form of insurance premiums, which are paid for by the borrower and help give the lender that same level of protection in case of default.
Again, this is unnecessary with a VA loan. The lender is backed by the government, and there’s no risk on their end. This means veterans are spared from potentially expensive monthly insurance premiums, and can build equity or pay down debt more quickly.
Interest rates are a vital part of any mortgage loan, and they’re much lower for VA loans than corresponding loans. They can be up to 1 percent lower in many cases, and the savings to veterans can often hit five figures over the life of the loan.
Veterans take a number of risks to help keep us safe, and because many active service members are also eligible for certain VA loans, spousal transfer is a very important element. This allows a veteran or active service member to pass their benefits on to a spouse if they pass – either in the line of duty or for other reasons later in life. This can be a huge benefit to a surviving spouse who might be in a very tough place.
City Creek Mortgage is your go-to mortgage company for VA loans and all other types of mortgage services in Utah. Speak to one of our brokers today to find out more.