Critical Ways That VA Home Loans Differ from Standard Mortgages

Veterans who are looking to purchase a new home or refinance their current home should always consider a VA home loan as an alternative to a standard mortgage. These loans come with a wide variety of benefits that could protect a homeowner’s finances for years on end. Here is a closer look at five of the primary differences between a VA home loan and a traditional mortgage.

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Down Payments

The minimum down payment for most homes is around 5 percent, but those wanting a larger home or lower payments may have to provide a down payment as high as 20 percent. With a VA loan, however, veterans could purchase their home with an incredibly low down payment or even no down payment in some situations.

Government Guarantee

The VA does not provide home loans directly to veterans, but instead helps guarantee loans offered by approved lenders. If the loan is defaulted on, then the VA will help to pay back some or all of the money. This government guarantee means that lenders are much more willing to make quick sales with little in the way of a down payment.

Credit Score

Maintaining good credit is absolutely vital when it comes to an affordable mortgage, and even a minor drop in one’s credit rating could affect their chances of receiving a loan. VA home loans are approved at a much higher rate as long as the veteran is not deemed a major financial risk. In some instances, the approved credit rating can be as low as 620 depending on a number of factors such as the overall value of the home. If you aren’t sure if you qualify for a VA home loan, contact Low VA Rates or a similar institution for a professional analysis.

Mortgage Insurance

Along with the down payment, one of the largest initial costs of purchasing a home is mortgage insurance. Unless the buyer can provide a down payment of at least 20 percent, most lenders will require mortgage insurance until sufficient equity has been built. VA home loans, on the other hand, often require little or no mortgage insurance.


Around one out of every 200 homes that are sold will be foreclosed upon, but VA home loans are rigorously guarded by lenders. Instead of allowing the home to be foreclosed, these lenders will often do everything in their power to make alterations to the loan in order for it to be financially manageable.

Those who are looking to save themselves time, money, and stress should consider their options for VA home loans if they are a past or current member of the military.

Author: Anica Oaks, freelance writer and web enthusiast