Because of their service to this country, there are many support systems in place for veterans. The problem is that many veterans don’t know what is offered to them. Veteran Affairs provided a huge element of support for veterans when VA Home Loans were enacted in 1944 as an addition to the GI Bill of Rights. However, most homebuyers – veterans or not – have a hard time deciphering which loan will be best for their situation.
All too often, veterans do not take advantage of the benefits of a VA home loan because they do not understand what is actually provided within them. There are plenty of advantages worked into the VA home loan structure but one that can provide freedom and flexibility for their lifestyle is: no prepayment penalties.
As is the case with most home loans, there are certain rules that lending organizations require the borrower to abide by. It is primarily structured this way so that the lender is ensuring a certain amount of revenue from interest-based on the term of the loan. However, organizations offering VA home loans can not penalize veteran-borrowers for paying back their loan before the term states.
How Is This a Benefit?
While prepayment might not seem like a big deal, it really is. Being able to pay back your loan before the term is up allows borrowers to relieve the financial burden that loans can instill. More importantly, it allows home loan borrowers to relocate, upgrade, downsize, or just find a home better suited to their needs without having to wait out a loan term.
This can grant veterans the opportunity to adjust to their lifestyle as time goes on. Maybe that means they can continue to grow their family with children or pets, build a business in or out of their home, relocate to a more accommodating neighborhood, move to a new state for work, or renovate the home their already and sell for profit. The opportunities are endless and would not be possible in a traditional home loan experience.
Other Home Loan Benefits
There are plenty of other benefits for veterans a part of VA home loans so speak with a home loan expert on what the VA can offer to you as you continue on your home buying journey. Be sure to ask which type of VA home loan will work best for you and your needs.