Walt Dobbs - NMLS #269374 - (916) 989-6222 - eMail me


Benefits and Advantages of VA Home Loans

Millions of veterans and servicemembers are eligible for a VA home loan. Even though many veterans may have previously used their loan benefits, there may still be an option for them to buy another home using VA financing with their remaining or restored loan entitlement.

Before applying for a new mortgage to finance a home purchase or refinance an existing mortgage, veterans and servicemembers should review some of the advantages of VA home loans:


Conventional loans typically require a 5 percent down payment, and FHA loans require 3.5 percent.

This can save you a substantial amount of money. For example, on a home with a purchase price of $350,000, a 5% down payment is $17,500. 10% is $35,000 and 20% is $70,000.


Private mortgage insurance (PMI) is an insurance that protects lenders in case of a borrower default.

With a VA Loan, however, there is no PMI. This is because the federal government backs all VA Loans and assumes the risk on behalf of the borrower that is typically covered by the PMI.

This VA Loan advantage allows you to build more and more equity in your house, effectively saving you thousands of dollars over the life of your mortgage.

FHA loans require an upfront plus an annual charge for mortgage insurance.

Conventional borrowers typically need to pay for private mortgage insurance (PMI) unless they’re making a down payment exceeding 20 percent of the purchase price.

On a loan of $350,000, your monthly savings could be approximately $268 or more than $3200 over the course of an entire year.

Limitation on buyer's closing costs.

Sellers can pay all of a VA buyer’s loan-related closing costs and up to 4 percent in concessions.

In addition, the VA limits the closing costs lenders can charge to VA loan applicants. This is another way that a VA loan can be more affordable than other types of loans. Money saved can be used for furniture, moving costs, home improvements or anything else.

Lower average interest rates than other loan types.

VA loans continue to have the lowest average interest rates of all loan types.

No prepayment penalties.

VA borrowers can pay off a loan ahead of schedule without any financial penalties.

A VA loan won't restrict your right to sell your home if you decide you no longer want to own it. There’s no prepayment penalty or early-exit fee no matter within what time frame you decide to sell your home.

Furthermore, there are no restrictions regarding a refinance of your VA loan.

You can refinance your existing VA loan into another VA loan via the agency's Interest Rate Reduction Refinance Loan (IRRRL) program or switch into a non-VA loan at any time.

Call a VA Home Loan Specialist at
(916) 989-6222

Start the VA Loan Process

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Call a VA Home Loan Specialist at
(916) 989-6222

An assumable mortgage, typically subject to VA and/or lender approval.

You may be able to have someone take over your mortgage payment, which can be a big benefit if you have an interest rate lower than what may be available in an environment of rising interest rates.

Foreclosure avoidance advocacy from the VA loan program

The VA has staff members who advocate on behalf of homeowners to find alternatives to foreclosure.

Don’t Rely on the VA for Everything

The VA cannot guarantee that the house you buy, whether it is new or previously occupied, will be free of problems or defects. The VA appraisal is not meant to be an "inspection" of the condition and functionality of property. If you have any doubts about the condition of the house, it is in your best interest to seek expert advice before you legally commit yourself in a purchase agreement.

Talk to your real estate professional. Most sellers will permit you, at your expense, to arrange for an inspection by a qualified residential inspection service and negotiate with you concerning repairs to be included in the purchase agreement. Such action can prevent later problems, disagreements and disappointments. Remember, VA guarantees only the loan, not the condition of the property. It is your responsibility to be an informed buyer and assure yourself that what you are buying is satisfactory to you in all respects.

VA cannot guarantee that you are making a good investment, or that you can resell the house at the price you paid. VA does not have authority to provide you with legal services.

Whether you're an active-duty serviceperson, a veteran, a member of the National Guard, a Reservist or surviving spouse of a veteran; or if you're a cadet at the U.S. Military, Air Force or Coast Guard Academy, midshipman at the U.S. Naval Academy or officer at the National Oceanic & Atmospheric Administration, you may be eligible for a VA loan.

Call a VA Home Loan Specialist at
(916) 989-6222