Understanding VA loans and VA-assumable properties can save you thousands of dollars and make homeownership more accessible. This guide breaks down everything you need to know about these valuable military benefits.
VA loans are one of the most valuable benefits available to service members, veterans, and eligible spouses. Here's what makes them special:
- No down payment required
- No private mortgage insurance (PMI)
- Competitive interest rates
- Limited closing costs
- No prepayment penalties
- Minimum service requirements
- Certificate of Eligibility (COE)
- Satisfactory credit score
- Stable income history
- Reasonable debt-to-income ratio
One lesser-known aspect of VA loans is assumability. In a high-interest-rate environment, this feature becomes particularly valuable.
VA loan assumption allows a buyer to take over the seller's existing VA loan with the same terms, including:
- Interest rate
- Remaining principal balance
- Repayment period
- Zero down payment advantage
- Lower credit score requirements
- Seller concessions up to 4%
- Funding fee can be financed
- New loan eligibility
- Renting out previous VA loan property
- Restoration of entitlement options
- Multiple VA loans possible
