VA Financing is a government-guaranteed loan program offered by the U.S. Department of Veterans Affairs (VA) to military service members and their families. The VA doesn’t lend the money, rather they guarantee the loan made by your lending company.
The biggest benefit of VA financing is there is absolutely no downpayment requirement. If you qualify for this loan, you can receive 100% financing for the purchase of your primary residence. You also will not have to pay Private Mortgage Insurance (PMI), and there is no prepayment penalty for paying the loan off early.
If you choose this type of loan, you will be required to pay a VA Funding Fee (unless you have a disability rating of 10% or greater), which you would not have with any other type of loan. However you are able to roll this into the loan financing, so you do not need to pay with cash up front. You also would not be able to use VA financing for a second home or an investment home, as it is intended for primary residences only. The benefits for this type of financing far outweigh the disadvantages, so if you are eligible, talk to your loan originator today.