Buying a house is exciting, but if you’re buying it with a conventional mortgage, you’ll need to make a down payment of at least 20 percent of the home’s purchase price to secure the loan. If you don’t have the full amount, you’ll need private mortgage insurance if you want to qualify for the loan in the first place. So, what happens if you try to buy a house with a VA loan in Dallas? Will you need to acquire private mortgage insurance? Here’s what you need to know.
VA Loans Don’t Require Down Payments
First and foremost, when you buy a home with a VA loan in Dallas, you won’t have to worry about making a down payment on the house unless you want to. You’re able to finance the full sale price of the house with your VA loan without a problem. The VA guarantees the loan which effectively satisfies the standard down payment requirement most lenders have.
This helps free up cash so you can focus on furnishing your new house, covering moving expenses, and making sure your regular monthly bills get paid on time. That said, if you do make a down payment, you’ll be able to lower your monthly payments for the life of the loan. Even better, the lender may offer you better loan terms and interest rates if you’re willing to put money down on the house.
You Won’t Have to Worry About PMI
Because the VA guarantees the loan, lenders won’t require you to purchase private mortgage insurance on your loan. They know that the VA will help reduce their loss if you default on the loan, so they won’t punish you for not providing a down payment on the house.
You will, however, need to pay the VA funding fee anytime you buy a house with a VA loan. This fee is used by the VA to help keep the loan program around and thriving. Your money will effectively help future buyers use VA loans so they can take advantage of the same benefits you receive. The amount of that fee will vary based on the price of your home and where you’re buying it.
Are You Ready to Buy a House?
If you’re a qualified veteran or active-duty military member, you can use a VA loan in Dallas to buy the perfect house for your needs. Just remember to get pre-qualified for your loan before you start shopping. Apply online today!