The Pros and Cons of Using a VA Loan

A Veterans (VA) loan may give active military personnel, retired veterans and sometimes surviving family members of veterans the ability to purchase a home that might not be available to them through more conventional mortgage loans.

Here's what you need to know about a VA loan:

Loan Qualifications and Limits: A VA loan can open the door to home ownership for cash-strapped or credit-challenged military personnel who might otherwise struggle to get a conventional mortgage loan. This type of loan offers tremendous flexibility in qualifying factors such as credit scores and debt-to-income ratios. In fact, VA loans may come with no maximum debt ratio at all.

Potential for Zero Down Payment: Additionally, VA loans do not require the down payment typically needed for a more conventional or FHA loan. The only other loan with no down payment requirement—the USDA loan—applies to rural areas and comes with some prohibitive income restrictions.

Additional Qualifications to Consider: That said, VA loans usually impose some qualifications of their own—qualifications which may not appeal to some buyers. For one, a VA loan can only go toward the primary place of residence, not a vacation home or second home. Military personnel who already own a home may therefore find this restriction a deal-breaker for their specific needs.

VA Loan Limits: VA loan amounts may also impose varying “guaranty” limits depending on where you live. The guaranty limit refers to your VA entitlement, which is the portion of your loan that does not require a down payment. If you want to buy a more expensive home, you may end up making a down payment—potentially making your VA loan not as attractive as other loan options.

As always, your best move is to call your trusted mortgage professional to discuss VA home loans and find out if it’s the best option for you.

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For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988.

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