Nowadays, modern homebuyers are facing severe issues for their poor credit score. The loan product might be changing but the root of the problem is similar. However, the ex-military service members are spared from strict credit score requirements. Instead of showing a 680 or 780 credit score to the lender, they can get away with 550 or 500. Believe it or not, the VA mortgage has more amazing benefits than this.
VA loan is a cost-effective option for the military members and their families. A private lender issues the mortgage and the U.S. Department Veterans Affairs guarantees it. The mortgage came to prominence during 1944 with one aim. Since the target has not changed, the authority still ensures houses to the service members. Now, these veterans do not have excellent credit. The remarkable loan program helps the veterans and their families to purchase and refinance a house. Therefore, VA loans are more essential than ever now. Not only has the mortgage become popular in Houston but it has also gained much fame nationwide. So, if you are wondering whether you need the best VA loans for bad credit in Houston, go through the rest of the article now.
No Private Mortgage Insurance
Unlike other loan programs, VA loans do not require people to buy private mortgage insurance. The federal government backs a part of every VA home loan; therefore, private mortgage insurance is not required. If you avoid PMI, you can save a handsome amount for the future. Usually, the PMI ranges from 0.5% to 1% on the entire loan amount per year. That’s why; a veteran investing in VA loans can definitely save thousands in the initial PMI costs. So, the PMI range can be zero!
Free from Putting anything down
At present, it is next to impossible to find a house without putting anything down. Whether you are purchasing a conventional or non-traditional loan, down payment is necessary. If you were about to choose an FHA loan, you might have to put down 5% to 20%. For non-traditional loans like FHA, it would be a 3.5% down payment. However, the best VA home loan in Houston, TX differs from every loan product. Yes, VA loan has strict guidelines but zero down payment is a one-of-a-kind benefit. So, the veterans can qualify for 100% financing once qualified for the eligibility test. Right now, the VA loan program is an effective tool in today’s lending landscape.
No Prepayment Penalty
If you wish to be debt-free, the prepayment penalties might not be favorable. The homeowners who have the capacity to pay off the traditional loan in the first 5 years, a big payment penalty might be bothering. The private lenders cannot charge prepayment penalties on the mortgage. Hence, the former military service members can pay off the mortgage before the loan period is over, without worrying about the prepayment penalty.
In order to make the best out of the VA home loans, a potential borrower should work closely with a VA-approved lender. So, find a professional lender now!
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.