What to Know About Using a VA Loan

Benefits and Drawbacks of Using a VA Loan

VA Loan Eligibility, and More!

Owning a home is a core tenet of the American Dream, and no matter if it’s your first home or the home you plan to live in for the rest of your life, those who have served our country get the benefit of having the option of using a VA loan to secure their home. Provided under the GI Bill of Rights, which was established in 1944 for soldiers returning from World War II, eligible veterans can use a loan provided by private lenders and backed by the U.S. government to purchase a home. A VA loan is a powerful tool for veterans to use when searching for a home, but there are certain things you should consider before deciding whether to use a VA loan to purchase your home or consider other financing options.

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VA Loan Eligibility

Before discussing the pros and cons of using a VA loan, let’s break down the requirements to be eligible for a VA loan. Below are the requirements to be eligible for a VA loan.

  • 90 consecutive days of active service during wartime
  • 181 days of active service during peacetime
  • 6 years of service in the National Guard or Reserves, or served 90 days (at least 30 of them consecutively) under Title 32 orders.
  • You are the spouse of a service member who died while serving or due to a service-related disability

You can still be eligible to qualify for a VA loan even if you don’t meet these requirements, contact me today, and I can connect you with a reputable local lender who knows the ins and outs of VA loans!

Benefits of Using a VA Loan

Below are just a few of the notable benefits of using a VA loan compared to other home financing options.

Relaxed Credit Requirements, and No Down Payment

One of the biggest benefits of using a VA loan is the ability to purchase a home without putting any money down and with relaxed credit requirements. Credit score requirements will vary by the lender, but qualifying for a VA loan typically requires a lower credit score minimum. If you were to use a typical conventional loan, you are required to put down a varying amount of money to purchase the home, which is not the case with a VA loan.

Lowest Average Interest Rates

While interest rates vary by the lender, VA loans will typically offer the lowest interest rate over the lifetime of your home loan, potentially saving you thousands of dollars on your loan, as well as expanding your buying power.


When using a VA loan, you don’t have to pay Private Mortgage Insurance (PMI). When using a conventional loan, you’ll typically need to put 20% down to avoid having to pay PMI, which can add to your monthly mortgage payment, as well as decrease your buying power by tacking on that extra cost to your monthly mortgage payment.


An assumable loan, especially in a market with higher average interest rates, is a huge perk to have as a home seller. Every VA loan is assumable, which means that any buyer, even if they are a civilian, can take over your mortgage loan when they purchase your home.

Drawbacks to Using a VA Loan

Less Equity in Your Home

One of the biggest advantages of being a homeowner is that you are building equity in your home while making your monthly mortgage payments. Not only is a home the place where you spend most of your time, but it is also one of the biggest investments you will ever make. By purchasing a home with no down payment, you’re starting with less equity in your home than you would when using a conventional loan or other financing options.

VA Loans are for Homeownership Only

If you are thinking of potentially using a VA loan to purchase an investment property, you’ll need to examine other financing options. VA loans are only available for owner-occupied properties, meaning that you cannot use a VA loan to purchase a rental property. You can, however, use a VA loan to purchase a multiunit property and rent out some of the units, so long as you are living in one of the units as well.

VA Funding Fee

The VA Funding Fee is a fee that you will pay at closing, unless you finance it into your loan, which increases the total amount that you owe. The fee goes straight to the VA and varies depending on whether you have purchased a home using a VA loan before, if you are putting money down, if you have received compensation from a service-related disability, or if you are a veteran’s surviving spouse.

Contact Me to Learn More About Buying or Selling a Home as a Veteran!

If you are looking to buy a home in the near future, and want to learn more about using a VA loan, contact me today! Having the option to use a VA loan when purchasing a home is an extremely valuable tool for veterans, but it’s important to work with a real estate agent who knows the ins and outs of VA loans, and who can put you in contact with a reputable lender who is experienced in VA loans. It is extremely beneficial to a potential home buyer who wants to use a VA loan to work with an experienced agent and lender, who can identify if a VA loan is the best option for you, and walk you through other financing options and the steps you need to take to meet all of your needs when buying a home.

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