Conventional loans require an average down-payment of 5% -20%.

With a Veteran mortgage you can buy a $417,000 home with no down-payment (in some areas the limit is much higher that $417000) Unlike the available conventional programs that offer $0 down payment a veteran mortgage does not have a minimum credit score requirement established by the VA. Eligibility for a Veteran mortgage is not based on your credit score, and you pay the same low rate whether you are making a 5% down-payment or no down-payment at all. This additional flexibility is one of the most popular features of the veteran mortgage.

A veteran mortgage does not require you to have mortgage insurance.

Conventional loans require a separate mortgage insurance if the loan is being made with less than 20% paid as a down payment. This means that you are throwing money away for the privilege of having a mortgage. With a veteran mortgage this simply is not the case. Because the veteran mortgage does not have the requirement of mortgage insurance you can save hundreds of dollars each month as compared to a conventional loan at the same interest rate.

If you have less than perfect credit getting a conventional loan in the current lending environment has become darn near impossible.

With a veteran mortgage much of those fears are washed away. The VA guarantees 25% of the loan balance to the lender as incentive to help out borrowers with a veteran mortgage. Because of this added incentive the lenders who provide the funds for a veteran mortgage are more willing to offer a competitive rate to borrowers who may not meet their normal credit score requirements. Simply put, a veteran mortgage offers security to both the lender as well as the borrower in a time where economic certainty comes at a premium.

One of the lesser known aspects of a veteran mortgage is that it is assumable.

Most people don’t realize that a Veteran mortgage can be passed from one eligible person to another. This helps in a few ways. First a home that is under a Veteran mortgage loan can be passed down to subsequent generations. This is a great thing for many service men and women who’s parents also served faithfully in the armed forces. Second, a very low interest rate can be preserved. If the Veteran mortgage was taken out during a period of very low rates a subsequent buyer can assume the payments at the much lower rate (provided they are eligible for a Veteran mortgage). This allows the great interest rates of one period in time to carry over to future purchasers of the home.

With a veteran mortgage prepayment penalties are a thing of the past.

In the past as added insurance for the lenders prepayment penalties were placed on loans that made them impossible to sell or refinance. The VA has forbidden such things to be attached to a veteran mortgage. Active duty members of the military need not worry about paying the bank for the right to sell their property when they have a veteran mortgage. This added flexibility is imperative for a group that moves as frequently as do the military.

Often forgotten with a Veteran mortgage is that they allow you to have a higher debt ratio than conventional loans.

Your debt ratio is a crucial factor in the loan qualification decision. With most conventional loans a debt to income ratio of 36% or below is required to qualify. During the qualification process they lender assesses your ability to repay the veteran mortgage. The debt ratio is used to evaluate the amount of payment responsibilities that you have outside of your housing costs. For most conventional loans you must have a debt ratio below 36%. Again because of the guarantee offer by the VA, It will be easier to qualify for a Veteran mortgage loan if your debt ratio exceeds the standard 36%.

When purchasing a home with a veteran loan you are given more leeway on the purchase contract.

With a veteran mortgage the seller of the home is permitted to pay up to 6% of the loan amount in seller concessions. This allows the seller to pay for your closing costs and have them wrapped into your new veteran mortgage. With more traditional loan programs the sellers concessions are capped at 3%. Because of the ability to finance out to 100% with a Veteran mortgage, this means that in some cases a home can be purchased without any out of pocket expenses. Imagine not being responsible for paying a single penny at the closing table to move into you new home. With a veteran mortgage this fantasy is in fact reality.

Perhaps one of the most oft used advantages of t veteran mortgage is the streamlined refinance option.

Once you have a Veteran mortgage you can use a streamline program to refinance to a lower interest rate and save on the monthly payments. Currently a Veteran mortgage is the only type of loan available in the country that allows you to drop your interest rate without having an appraisal performed. And should rates improve significantly again you can do a streamline refinance of the Veteran mortgage again with no cash out of pocket at closing.

Interest rates of a veteran mortgage have never been lower.

While they often track closely to the rates of the more common loan programs, at the current time rates on a Veteran mortgage have never been lower. Never before have veteran mortgage rates for 30 year fixed programs been as low as 4.5%, with hybrid veteran mortgage rates coming in below 4%. If you have been considering a Veteran mortgage the time to act is NOW!