The VA loan system was built to help remove the “Disadvantages” of being in the military and/or affected by military service. For example, during tours in different countries, active personnel may have a hard time building credit, or may accidentally let their credit rating slip, and/or simply have less time to shop around for a good mortgage and/or fair-priced property. To redress the balance, the VA loan system offers home loans that are easier to get into.
Easier to Buy a Property
People in the military are targeted by scammers because the VA loan system is viewed as an exploitable advantage for scammers. To these people, when they are holding a fly swatter, everything is a fly. The VA loan system is set up to make it intensely difficult to gain a definite and exploitable advantage, so don’t believe the scammers.
In short, a VA loan is easier to get than a regular housing loan or mortgage if you are in the military, if you are a military veteran and/or the spouse of somebody in the military. There are a few other caveats, but that is the gist of who can get these loans.
Interesting Misinformation About Interest
Many VA loan sellers will try to hint that they have the best interest rates, or that their interest rates are better than the regular mortgage marketplace. This is almost never true, but the VA loan companies are able to say it because of a slight loophole in false-advertising marketing.
Let’s say that you have a credit rating, you can get a VA loan, but they are not going to offer you a better interest rate than the regular mortgage market. However, if you have okay credit that is drifting into the wrong side of bad credit, then the VA company “May” offer you a better interest rate than the regular mortgage marketplace. The problem is that the rate is still pretty high when compared to good-credit candidates, it is just that the regular mortgage lenders will hike up their rate or refuse to lend to people with okay/bad credit.
The Deposit is a Big Selling Point
VA lenders are private lending companies. The only reason they are able to offer favorable terms to people in the military is because they are working under a national scheme, with state rules, and the lenders are duly protected because of it.
They are private lenders, so some will accept people with very bad credit and some won’t. Some will offer a low interest rate and some won’t. On a similar note, many of the private lenders allow you to take a loan without placing a deposit on the property. Unless state rules make it different for them, then the biggest benefit of a VA loan is the fact you don’t need to raise a deposit to get a mortgage when making your house purchase.
Can You Afford It?
As this article has slowly unveiled, there are several benefits to getting a VA loan if you are in the military, or a vet, or otherwise eligible. Again, it doesn’t offer a direct advantage over other people, it simply redresses the balance with the goal of fairness.
Still, even with favorable terms, even without paying a deposit, you should still look at your VA home loan calculator and come up with a budget. The VA lenders are private companies, they are not charities, so they will come after their money if you cannot pay, and they will repossess your house if you keep falling behind on your payments. That is why they are so picky about which houses and properties they will fund. Also, as a final note, if the house you want is a little over the VA loan eligible amount, you can ask to borrow a little more money. Doing so only presents two possible problems. The first is that you will have to pay a deposit on the extra money you borrow, and secondly, they could say no.
