Pros and Cons for the Best VA Loans for Bad Credit in Houston, TX


Did you know VA loans are not for every military member? The exclusive loan benefits are dedicated to the veterans, active duty members, and their surviving purposes, only if their service history is eligible. Now, this is not something to feel disappointed over. As every coin has two sides, the VA loans have disadvantages and advantages. Even though the disadvantages are less annoying, you should know everything before committing to a VA loan.

In order to find the best VA loans for bad credit in Houston, keep the pros and cons in mind. VA has been a popular mortgage option for decades, and its popularity is not going to die down anytime soon. For veterans, this is undoubtedly the best loan with great terms in the market. Knowing the advantages and disadvantages can save you from unpleasant surprises. So, here are a few pros and cons that you should remember.

Low closing costs are helpful

VA loans put a cap on the closing costs that the veterans are required to pay. You might notice a similar option for other mortgages, but VA has a different rule here. It is a way for veterans to save in the upcoming days. If you were going to choose an FHA loan, you might have to pay more than $1000 as lender fees. Since lenders bill for processing documents and underwriting, the FHA borrowers need to pay a high amount. However, VA buyers are free from such expenses.

VA funding fee is mandatory

Well, it is compulsory unless you are a veteran suffering from a service-related injury. However, an active duty service member or veteran needs to pay for the funding fee. Typically, it is 2.15% of the mortgage for a first-time VA buyer. If you are using the loan benefit for the second time, you will pay 3.3% of the loan amount. Even though it is a disadvantage for many borrowers, it is not exactly so, in the first place. In addition to the context, the mortgage can be fully financed. Provided that you are not liable to pay for mortgage insurance premiums and down payment, the funding fee is nothing. Remember, the VA can change the fees according to the guidelines. Also, the department checks the type of mortgage, previous use of VA loan, and military category before announcing the final fee.

No down payment so save more

If you look at other loans, you will be shocked to see the mortgage insurance. If you are willing to pay down 3.5% or 5% of the loan value for any mortgage, you are obliged to pay for monthly mortgage insurance premiums. Based on the program, the amount and factors change. So, you would have to shell out a significant amount for the mortgage payment. But the loan does not ask for down payment! Hence, you need not pay for a monthly mortgage insurance premium.

In the end, the best VA loans prove to be much better than conventional loans. Talk to your lender and run different scenarios to understand whether it is the best deal for you.


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