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  • Writer's pictureArizona Lending Group

Unraveling the Benefits of VA Loans

Are you a military veteran or active-duty service member looking to buy a home in the beautiful State of Arizona? If so, you might be eligible for a VA loan – an incredible home financing option exclusively designed for our country's heroes. Today, we'll explore the many advantages of VA loans and how they can make your dream of homeownership in Arizona a reality. So, grab a cup of coffee and join us as we uncover the secrets of VA loans in Arizona!

What is a VA Loan?

A VA loan is a mortgage that is backed (or "guaranteed") by the U.S. Department of Veterans Affairs (VA). This great program aims to help eligible veterans, active-duty service members, and surviving spouses acquire a home. VA loans provide unique benefits, such as no down payment requirements, lower interest rates, and more flexible credit guidelines. In Prescott, Arizona, a top-notch mortgage broker can help you navigate the VA loan process and secure the best mortgage rates available.

The Advantages of VA Loans

  1. Zero Down Payment Required One of the most significant benefits of a VA loan is the zero-down payment requirement. Unlike conventional mortgages that typically require a down payment of 5-20%, VA loans allow eligible borrowers to finance 100% of their new home's value. This means you can buy a home in Prescott, Arizona without having to save for a hefty down payment.

  2. Competitive Interest Rates VA loans generally offer lower interest rates than conventional loans, due to the Guaranty. This can save you thousands of dollars over the life of your loan. A skilled mortgage broker in Prescott, Arizona can help you lock in the best possible interest rate for your VA loan.

  3. No Private Mortgage Insurance (PMI) Since VA loans are backed by the federal government, there is no requirement for borrowers to purchase private mortgage insurance (PMI). PMI is typically required for conventional loans when the down payment is less than 20%, and it can add a significant cost to your monthly mortgage payment. With a VA loan, you'll save money each month by avoiding PMI.

  4. Flexible Credit and DTI Requirements VA loans offer more lenient credit and DTI requirements compared to conventional mortgages, making it easier for borrowers with less-than-perfect credit to qualify for a home loan. While the VA doesn't set a minimum credit score requirement, many lender-partners of Arizona Lending Group will still prefer credit scores above 580.

  5. Limited Closing Costs The VA limits the closing costs that can be charged to borrowers, ensuring that eligible homebuyers don't face excessive fees when purchasing a home in Prescott, Arizona. Additionally, sellers can pay up to 4% of the loan amount in closing costs, potentially saving you even more money at the closing table.

  6. VA Loan Assumption Another unique benefit of VA loans is the loan assumption feature. This means that if you decide to sell your home in Arizona, the buyer can assume your VA loan under the same terms, which can be a significant selling point in a competitive market. However, this may have an impact on your eligibility for another VA Loan in the future. Consult with one of Arizona Lending Group's mortgage experts prior to agreeing to any assumption deal.

VA loans offer an incredible opportunity for eligible veterans, active-duty service members, and surviving spouses to secure a mortgage with unbeatable benefits. If you're considering buying a home in Prescott, Flagstaff, Scottsdale, or another part of Arizona, be sure to consult with a knowledgeable mortgage expert at Arizona Lending Group to help you navigate the VA loan process and make the most of this advantageous financing option.

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