VA Loans are mortgage loans guaranteed by the U.S. Department of Veterans Affairs. Created after WWII, VA loans allow veterans the ability to purchase a home with no down payment no monthly mortgage insurance. VA loans are available only to veterans or their surviving spouses. The loan is assumable with prior approval from the lender so it can be taken on by a new borrower who receives all of the advantages. Since the loan is guaranteed by the federal government, banks are more willing to lend and require less documentation.
While the most obvious benefit is receiving a loan with no money down, another major plus is that monthly mortgage insurance is not required. This alone can help a family save thousands over the life of the loan. Interest rates are extremely competitive for VA loans and are frequently more favorable than conventional conforming loans. Refinancing a VA loan is easy and straightforward and can be done much faster than a traditional mortgage refinance. Streamline refinancing is also available to those with VA loans and allows the borrower to avoid an appraisal and secure historically low interest rates.