VA loans have been around for quite a while, but unfortunately, not every veteran has learned to take advantage of them correctly. Which is not a good thing at all, given all the potential benefits these loans hold for the average eligible person. It’s in your best interest to familiarize yourself with the way they work, and to do your best to use them actively if you’re in a situation where extra money can come in handy.
This can allow you to take control of your financial life much more effectively than with other tools available on the financial market. VA loans can make your situation much more bearable if you’re in urgent need of money. Let’s take a look at some of the more important points that you should be aware of.
Skip the Down Payment
A great benefit of VA loans is that they can allow you to completely forego the down payment for various types of larger purchases. This can even include a new home! Of course, that won’t reduce the overall price of the purchase, it just means that you won’t need to have any cash upfront in order to get started. This can make things significantly better for you in most cases. It can not only allow you to purchase certain things faster than other people in your age group, but it can also open up the doors to various new opportunities on the consumer market.
After all, when you don’t have to think of a down payment, you can easily start scaling up your expenses without taking a financial hit. Of course, there’s a limit to everything, and you should be careful not to go overboard with this.
Get Qualified More Easily
It’s also generally easier to get qualified for a VA loan as opposed to a regular one. Even credit score issues don’t have to be that problematic when you’re eligible for a loan of this type. Most scary-looking blemishes on your record will be gone after a shorter period compared to what others have to deal with, and you’ll be able to get back on your feet faster and without that much effort.
Keep in mind that certain credit issues will not be ignored that easily by institutions though, so you may have to wait a bit longer before taking out your VA loan. If you’ve had to deal with bankruptcy in your past for example, this can significantly change the game. Make sure that you get a consultation that covers these details in depth before committing to anything that would require the financing provided by your loan.
Speaking of qualifying, it’s also easier to get refinancing deals when you’re working with VA loans and not regular ones. You don’t have to qualify all over again, as is common with other types of loans on the market, and you’ll be able to enjoy more financial freedom as a result. You can even use refinancing deals to spend the money in any way you can think of, which is a rare benefit that’s often not available to other people dealing with loan refinancing.
Take advantage of this wisely though, as it can put you in an uncomfortable position if you’re careless with how you’re spending the money you’re taking out. After all, no matter how great a VA loan’s conditions may be, in the end it’s still a loan, and still something you have to take care of in a responsible manner.
Tax and Misc. Benefits
Last but not least, you can also count on some great tax benefits when taking out a VA loan. For example, most veterans with a VA purchase loan can often claim deductions on things like the interest on their mortgage, origination fees, and more. It’s best to consult an accountant before making any assumptions in this regard though, as you don’t want to be hit by an unpleasant surprise. In most cases though, if there are any surprises involved in the deal at all, they tend to be positive ones.
VA loans often don’t have any early repayment penalties as well. This is a problem that many borrowers have to deal with when they suddenly find themselves in an unexpectedly better financial situation. You can take a significant financial hit as a result of those fees if you didn’t read the fine print carefully. That’s one less problem for veterans to worry about though, and another great point in favor of VA loans. Keep in mind that there might be some exclusions. This is not a universal rule and not something you should count on by default – consult the institution you’re borrowing from to ensure that you don’t find yourself in a sticky situation later on.