Buying a home is the most expensive purchase most people make in their lives. Down payments, interest, closure costs and other fees in connection with home ownership are added to the purchase price.
But buyers who currently serve in the military or who are veterans can take advantage of government-sponsored home loans that don’t require them to pay a down payment or the mortgage insurance typically charged when a borrower pays less than 20 percent.
Thanks to a new law, there are now even more borrowers Access To These Affordable VA Loans, supported by the US Department of Veterans Affairs.
Tens of thousands are getting new access to VA loans
A bill signed by President Donald Trump earlier this year allows more National Guard members to buy homes with VA loans. It is good timing given the mortgage interest are still at historically low levels.
Prior to the legislation, those who served in the Guard were only eligible for the VA Home Loan Program if they had 90 consecutive days of active service or if they had completed six years of service.
Now the threshold is 90 days of full-time service with at least 30 consecutive days. And the change is retroactive. The United States National Guard Association has estimated that up to 50,000 Guard members have received instant access to VA loan benefits.
More than 24 million military veterans have benefited from the VA home loan program since its inception in 1944, says North Carolina Republican Tom Tillis, a supporter of the law.
Restricting guards and reservists earlier – many of whom responded to the COVID-19 pandemic and helped with vaccination efforts – was simply a “technique,” Tillis said when the law was passed last year.
How Borrowers Can Save With A VA Loan
VA home loans, intended for service members, veterans, and some surviving military spouses, are provided by private lenders, including banks and mortgage lenders. The VA guarantees part of the loan so that borrowers no need to lay down money or pay the premiums for private mortgage insurance.
However, you have to pay a pre-financing fee help offset US taxpayers through the loans. The fee can be up to 3.6% of the loan amount.
When you are ready to buy a VA-covered mortgage, remember that the best interest rates go to borrowers with the highest creditworthiness. If you haven’t checked in in a while nowadays it’s easy Check your credit score for free.
Price comparisons will help you Find the lowest available mortgage rate near you and to someone with your creditworthiness. Studies by mortgage giant Freddie Mac and others have found that borrowers who seek loan offers from at least five different lenders generally save thousands of dollars over time.