By:Brandon Fischer

Conventional loan programs can take a long time to secure. They are tricky with a lot of red tape. Little errors on the application could set the entire process back. That’s why many active duty service members and veterans are choosing the government-backed VA loan. They’ve sacrificed so much for the country. The least they could ask for is to purchase a home without the frustration.

The Benefits of VA Loans

The U.S. Department of Veteran Affairs insures the VA loan. That means lower initial and monthly rates for buyers. On interest rates alone, veterans could save an additional $50 to $75 per month.

On top of that, there is a NO down payment option. Coming up with the starting funds for a home is usually the hardest part of the experience, and conventional programs can sometimes request up to 25% down payment. With the VA loan, taking such a large payment out of the equation can relieve some of the weight off a potential homebuyer’s shoulders.

However, if a veteran does choose to try to save the money for a down payment, the VA program does not restrict gifted or borrowed money like conventional loans. Family members and friends are allowed to help out.

Another great benefit to the VA loan program is the government restricts lenders from charging hidden fees. Buyers who go the conventional route are sometimes surprised to see just how many additional fees were tacked on to their loan deal. VA loans will have lower closing costs than most conventional loans because of the no hidden fee rule.

Another way the VA loan could save veteran lots of money is due to the fact that it does not charge private mortgage insurance (PMI). No PMI gets rid of about $100 to $300 per month. That could be a weighty responsibility if a buyer already has a high monthly mortgage payment.

Eligibility and Applying

Before making a decision to go with the VA loan, a veteran needs to be sure he or she is eligible. The potential homebuyer must be able to prove that he or she served in the military for 90 days during a time of war and 181 days during a time of peace. A person who was dishonorably discharged will not even be considered for a VA loan. Spouses might be eligible for the VA loan if their partner is deceased due to war.

The last step is receiving a Certificate of Eligibility, which does not take long. A VA specialist can help with that as well with the standard application process.