The Advantages of a VA Home Equity Loan

Using a VA home equity loan is a very popular option for those that have been involved in the military at some point. You have to have served in the military or still currently serving in order to qualify for this type of program. Therefore, only a select few people can actually use them. However, if you qualify for this type of loan, you will be able to secure many advantages over a traditional home equity loan with it. Here are a few ways that a VA home equity loan differs from a traditional loan and why you would want to get one.

Advantages

There are actually several advantages of VA home equity loans over traditional home equity loans. For one thing, they set them up so that there are often no out-of-pocket expenses for you. When you can do a loan from beginning to end without paying a dime out of your own pocket, this is a huge advantage to be grateful for. This opens the door for many people that would otherwise not be able to do a loan.

In addition to that, the interest rate that you will be able to secure is almost always lower than what you would be able to get in the open market. The VA makes sure that their customers get the lowest interest rate around. This can save you thousands of dollars in interest payments over the course of your loan. Any time you can save money on interest, it is definitely to your advantage. 

Another major advantage of this type of loan is that you do not have to have stellar credit. You can qualify for this type of loan even if your credit is bad. While they will review your credit file, it is not nearly as important as it would be with a traditional lender. This can be a huge advantage for those that have run across bad at some point financially. 

With VA loans, there is also no prepayment penalty. Having no prepayment penalty, makes things a lot easier on you. Things are now a lot more flexible because you have options. If you want to sell the house and pay off the loan, you are free to do so without incurring a penalty. If you need to refinance again later, you can do so without paying thousands of dollars. 

Ways to Use the Loan

While you know that a VA loan is superior to other types of loans, you may be unclear as to how you could benefit from one. There are many reasons why you may need to get a home equity loan from the VA. You could consolidate high interest debt, you could improve your existing home, buy a second home, or do a number of other things. Regardless of your reason, this will almost always be your best option because of the low interest, and no closing costs. Just make sure that you are tapping your home equity for a good reason before you go through with it. 

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