Many people often wonder what the difference is between a conventional loan and a VA loan. If you look at the two programs in their simplest terms, a VA loan is backed by the U.S. Government while a conventional loan has no real traditional backing. The only backing that a conventional loan has is securitization from Fannie Mae and Freddie Mac. A VA loan is fully backed by the government and offers a wide range of incentives.
What VA Loans have to Offer
First and foremost, veterans of the U.S. Military do not require any sort of credit score to qualify for a loan program. The Veterans Administration looks at past loan repayment history that is used to qualify a vet for financing. Next is the amount of the down payment a veteran is required to pay. In most instances, on both purchase and refinance transactions, the veterans pay very little or in many cases nothing in down payments. Those types of terms are unheard of with conventional loans. Also, interest rates are usually around the prime rate for VA Loans, which hovers around 3.75 percent. A conventional loan requires near perfect credit and debt-to-income ratios in order to qualify for the prime rate. The advantages of VA Programs for a purchase or refinance transaction far outweigh conventional loans.
How MortgageDepot can Help
First of all, we are the mortgage leader throughout the State of New York. We specialize in providing veterans with the right loan program at very affordable rates. It is virtually a one stop shop for any type of mortgage need, including loans backed by the Veterans Administration. Find out why we are the leader in providing quality mortgage products to prospective clients.
Contact one of our loan consultants to learn more about this program.