Is Now the Time to Buy? When to Use Your VA Home Loan
For military members and veterans alike, finding a house to call their own is a wonderful investment. While a VA home loan will certainly help you accomplish that goal, there may be times that using this benefit might not be in your best interest. If you’re trying to decide if now is the time to buy and are getting ready to explore your home loan options, don’t rush. You need to do what’s in your best interest. Here’s when you should use your VA loan to buy a home and when it might not be the best idea.
When You Should Use a VA Home Loan
In many instances, veterans benefit more from using VA loans to buy a house. If you find yourself nodding along with these points, use your VA loan instead of taking out a traditional mortgage.
You Don’t Have Money for a Down Payment
The biggest draw of VA loans is that you don’t need to have a down payment to qualify for the loan. With most traditional mortgages, you need to have about 20 percent of the purchase price of a home saved up to qualify for a loan in the first place. A VA loan lets you borrow the full amount of the purchase price without penalty.
Your Credit Is Less Than Stellar
If you don’t have great credit, you could end up with a higher interest rate on a traditional mortgage. This is because banks use credit scores to decide if you’re a risky borrower. Since VA loans are guaranteed by the government, banks put less emphasis on credit scores and will give you a fair rate even if your credit score is low.
When You Should Use a Standard Mortgage
There are times that a traditional mortgage may be a better fit.
You Have a Down Payment Up Front
If you already have a 20 percent down payment saved up, it’s worth comparing both VA loan and traditional mortgage rates. A standard mortgage could end up saving you money over the life of the loan.
You’re Buying a Vacation Home
Unfortunately, you can only use a VA home loan to buy a house you plan to use as a primary residence. If you’re buying a vacation home or an investment property, you’ll need to apply for a traditional mortgage.
Get More Information
The best way to decide which type of loan is best for you is to speak with an expert. Contact us today to discuss if a VA home loan is the right choice for your needs.
