Skip to main content

A vet shaking hands with a professional.

When people decide that they want to buy a home, they usually have a couple of financing options to choose from. And while there can be pros and cons to different options, army vets have the special privilege of getting a VA home loan. Therefore, we are usually surprised that there are still some vets out there that aren’t aware of how beneficial these loans are. To combat this, we will use this article to cover the benefits of a VA home loan.

Notable benefits of a VA home loan

VA home loans are one of the best financial aids that the U.S. government provides to army vets. Through it, millions of vets achieved their dream of becoming a homeowner. Therefore, if you are eligible for one, you’d be hard-pressed to find a better option. Here is why.

No down payment

When it comes to the benefits of a VA home loan, you can hardly beat the fact that it doesn’t require a down payment. Yes, you read that right. If you opt for a VA home loan, you do not need to gather funds for a down payment.

: Calculator laying on top of money.

When it comes to the benefits of a VA home loan, you can hardly beat having no down payments.

Alt: Calculator laying on top of money.

The average down payment for a home loan in the U.S. is around 6%. As of writing this article, the average home cost in the U.S is $428,700. This means that the average down payment for the average U.S. home is $25,722. So, even to get a loan, you will first have to come up with around $26,000. This, for most vets, means years of saving up. Meanwhile, with a VA loan, you can finance 100% of the property value. You can use our mortgage calculator to better understand how much you save from not having a down payment.


PMI stands for Private Mortgage Insurance. It serves to protect the lender (usually the bank) from the borrower’s default. If the borrower cannot put down a least 20%, lenders will require their borrowers to pay monthly mortgage insurance. PMI is usually between 0.1% and 2% of the loan amount per year. Once the borrower builds up to 20% equity in the home, they no longer have to pay for PMI.

As you can imagine, these added costs can be a strain on army vets. This is why VA home loans don’t require any monthly insurance. This fact alone allows vets to increase their buying potential.

Reasonable interest rates

Another notable benefit of VA home loans is that they have the lowest fixed rates in the market. Currently, the average fixed rate for a 30-year loan is 6.83%. Meanwhile, the average rate for a VA home loan is 6.19%. Over the course of 30 years, this seemingly minute difference can stack up quite noticeably.

A person going through interest rates over different decades.

Once you put them on paper, you will see how important interest rates are.

Alt: A person going through interest rates over different decades.

Lower credit requirements

For a conventional home loan, you need a near-perfect credit score. After all, the loans that banks give out are all about risk management. This is why your interest rates will skyrocket if you don’t have a perfect credit score. Or you won’t be eligible at all.

With VA home loans, you won’t have to stress much about your credit score. Yes, it will need to be in decent shape. But it doesn’t have to be nearly as perfect as conventional home loans. VA loans also tend to be far more forgiving for vets bouncing after a foreclosure, short sale, or bankruptcy. Therefore, you can start your home loan application when you see fit.

Closing costs

All mortgages come with closing costs. These typically range between 3% and 6%. But, with VA loans, you may not have to pay them in their entirety. As a veteran, there a limits to what you’ll have to pay. Other parties will have to cover some closing costs that you otherwise would. This largely depends on the fine print of the home loan. But, overall, even a smaller reduction in closing costs will increase your buying power.

Multiple usages

What people often get wrong about VA home loans is that they see them as a one-time aid. Meanwhile, VA home loans are something that vets can rely on as many times as necessary. You don’t even have to pay back your ongoing VA loan in total to qualify for a different one. Therefore, one of the best tips for military families is that if you need to relocate your family to a new area and you wish to get everyone involved, you won’t have to rent out your new home. Instead, you can set up payment plans with VA loans so that after a decade or two, you own multiple properties.

: A person shaking hands with a mortgage broker in order to enjoy the benefits of a VA home loan.

You can use VA loans as much as you need to make your life easier.

Alt: A person shaking hands with a mortgage broker in order to enjoy the benefits of a VA home loan.

No Payment Penalties

Certain home loans give you clear incentives to stick to the payment plan. If, by some chance, you have increased income and you wish to pay off your loan beforehand, you might have to pay penalties. After all, the lender counted on the mortgage rates. And will want to gain as much money from you as possible.

Well, with VA home loans, you won’t have to worry about this. If you get some extra finances and wish to pay off your loan, you can do so with no extra charges. This enables vets to consider future home purchases and refinancing options without worrying about additional expenses.

Final thoughts

While there are other benefits of a VA home loan, we feel that these paint a good enough picture. If you are considering getting a VA home loan, we would advise you to first do ample research. Know that there are different types of VA loans (not just for home purchases). You also have IRRRL, EEM, and Cashout Refinance to keep in mind. Also, remember that VA loans no longer have a limit. But before you run to get one, you should ensure that you are eligible. Depending on when, where, how long, and in what capacity you served, you may be eligible for different financial aid. So, do your homework and learn how your country can aid you.



$0 Down VA Home Loans:
Are you a Veteran?