VA Loans Versus Conventional Loans
VA Loans Versus Conventional Loans
VA Loans Versus Conventional LoansIt is a whole lot easier to get a VA loan than it is to get a conventional home loan. This is the main difference. In addition to this, VA loans have some other advantages over the conventional too...VA Loans are Guaranteed by the VAThe Veterans Administration, or US Department of Veterans Affairs, guarantee a VA loan. A conventional loan doesn't come with any sort of guarantee of acceptance. Many people, even people with stellar credit, will try and fail to secure a loan from any number of lenders for any number of reasons. They may not have the business or financial history to take out the loan, they may have certain expenses or lifestyle factors that make the banks wary. In fact, a lender can select just about any reason that's convenient to deny you for a loan. A VA Loan is guaranteed by the VA, and a guarantee is a hard thing to find in this economy.VA Loans Require No Money DownWell, most of the time. Some VA Loans will require some money down, but the majority of them will not. If you're taking out a particularly large loan or have poor credit or some other factor making you higher risk, you may wind up paying a down payment, but a major component of a VA Loan is to get money into the hands of veterans by allowing them to skip past down payments and other setbacks on the road to securing a loan.ExclusivityVA Loans are easier to obtain than conventional loans exactly because not everybody is eligible for them. A bank offering the easy qualifications and no money down of a VA loan to the general public would immediately be bombarded with borrowers who, most likely, would never be able to pay off said loans. VA Loans are available only to veterans, and to the spouses of veterans killed in the line of duty assuming that the spouse has not yet remarried. By appealing only to these people, VA loan lenders can afford to offer a much easier and quicker application and lending process.Easier QualificationsVA Loans typically require far fewer qualifications than conventional loans. Again, the whole point of a VA Loan is to help veterans and their loved ones take out loans more easily. Conventional loans will typically require, at the very least, five percent down and mortgage insurance. When you apply to get a VA loan, you don't need any sort of mortgage insurance and you don't usually need to put any money down. This alone is a major factor in the financial plans of many veterans and their spouses.There are a lot of minute differences between the process to apply for a VA loan and applying for a conventional loan, but what it all comes down to is that VA loans are a lot easier to take out than conventional loans. Unless a really great offer comes your way, anyone who is eligible for a VA loan would be well advised to take full advantage of the opportunity.A VA loan is easier to take out, there are fewer requirements, there are no down payments involved, in short, it's just plain easier. You don't need any specific type of insurance to take out a VA loan, all you need is to be eligible for the VA loan program, and you can take out a VA loan, simple as that.