How much money can you save with a VA loan? 

Millions of veterans have taken advantage of the VA loan program and saved themselves thousands of dollars.

I know firsthand how great the VA loan program is and how much money you can save. I'm going to break down for you exactly how much money you can save by using a VA loan instead of a traditional mortgage.

Zero Down Payment

The most significant benefit of the VA loan is that qualified Veterans can purchase without a down payment. Veterans and active service members who have completed their service can buy a home without having to save for years for a typical down payment. The no down payment feature on a VA loan is a huge advantage that allows military borrowers to enter the housing market sooner than if they had to wait to save for a down payment. For an FHA loan, the minimum down payment amount is 3.5 percent, and for conventional financing, it's often 5 percent. On a $750,000 mortgage, a military borrower would need to come up with $26,250 in cash for an FHA loan and $37,500 for a typical conventional loan. The no down payment feature of the VA loan can save military borrowers thousands of dollars at the outset of homeownership.

Lower Interest Rates

For the last six years, VA loans have consistently had the lowest average 30-year fixed interest rates on the market, according to data from ICE Mortgage Technology. This is a huge benefit for Veterans, who can save 0.5 to 1 percent every month on their mortgage payments, and over the life of their loan. These savings can add up to thousands of dollars, which can be used for other purposes such as home improvement projects, investing in a college education, or simply having extra cash every month. In addition to having lower interest rates, VA loans also offer other advantages such as no down payment requirements and flexible eligibility criteria. For Veterans looking to purchase a home, the VA loan program is an excellent option that can save them money both in the short and long term.

No Private Mortgage Insurance (PMI)

For many Veterans, the biggest challenge in securing a conventional loan is coming up with a 20 percent down payment. This can often be a prohibitively high amount, especially for first-time homebuyers. Private mortgage insurance (PMI) is insurance that protects lenders in case of a borrower default. Many conventional lenders require borrowers to pay private monthly mortgage insurance unless they can put down at least 20 percent. This means that borrowers will need to pay this monthly fee until they build 20 percent equity in the home. However, VA loans do not require private mortgage insurance. According to the Urban Institute, the average range for PMI premium rates are 0.58% - 1.86% of the original amount of your loan. No PMI allows Veterans to stretch their buying power and save. Over the life of a loan, this can potentially save Veterans billions of dollars in mortgage insurance costs.

VA Loan

For Veterans looking to purchase a home, the VA loan program is an excellent option that can save them money both in the short and long term. So if you're a Veteran looking to buy a home, be sure to ask about a VA loan—it could be the best option for you!

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