VA Loans, No Money Down Loans, and Other VA Benefits

VA home loans provide several important advantages to qualified borrowers—advantages FHA borrowers and conventional borrowers won’t have access to.

One of the best of these is the VA loan no money down option. Did you know that in typical VA home loan cases a qualified borrower won't have to make a down payment? This is true when the sale price of the home is at or below the appraised value of the property. In cases where the asking price is higher than the appraised value the borrower can still buy they home with a VA loan but is required to pay the difference between the amount the VA loan will cover and the asking price.

(Borrowers may also be required to put money down on a VA loan if they don’t qualify for 100% financing due to poor FICO scores or other financial issues.)

Another advantage of the VA home loan involves the borrower's ability to “freely dispose of the property”. VA mortgage loan rules don’t allow any restrictions on the sale of your home. Better still, the borrower cannot be required to sign a sales contract restricting the sale or transfer of the property.

That is true for condominium units as well as suburban homes. You cannot be required to have the sale of any property you buy with a VA mortgage approved by a third party—your VA condo loan won’t be approved, for example, if restrictive language in the contract or condo owner’s association agreement prevents the buyer from selling the property at any time. With condo units, this is a sticking point when it comes to something called the “right of first refusal” clause.

A VA borrower can sell his or her property at any time, and/or pay off the loan at any time without a penalty—no early payoff penalties are permitted on VA loans or refinance loans.

VA loans can also be assumed with the participation of the lender. No restrictions may be placed on the borrower’s basic right to put the home up for sale to a qualified buyer, but if you want your home assumed, the lender’s participation in the transaction is key.

When you sell a home purchased with a VA mortgage, you are free to apply to have your VA loan entitlement restored to 100% so you can purchase another property with a VA loan. This VA loan entitlement restoration is possible with help from your lender or you can apply on your own.

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