Finding an affordable mortgage that you’re eligible for can be challenging, especially in the current home buying market. Despite so many different loan options available, it can be difficult to find the one that’s right for you.

If you’re a veteran or an active-duty military member, then you likely qualify for a VA loan! Even if you qualify for other loan types, if you can apply for and benefit from a VA cash-out refinance loan, then it’s definitely worth your time. In many situations, VA loans are the best option available and if you glance at the eight reasons below, you’ll quickly understand why.



While other mortgages will require a down payment of anywhere between 3.5% to 20%, a VA loan does not require a down payment. For many people, providing a down payment is one of the biggest obstacles in buying a house. You need to come up with a large sum of money before you can benefit from the loan and in many cases, this is very difficult.

With a VA loan, you won’t have to scrounge up every last penny you’ve saved in order to put down a down payment. Instead, you can benefit from the loan without this obstacle.


Another major challenge for potential homeowners is having a high enough credit score to be approved for a loan. While conventional mortgage loans have a minimum score of 620, FHA loans set their minimum to 580. Many lenders raise their minimum score requirement to avoid risky investments.

In many cases, you may be asked to show a credit score of 680 or higher which makes it difficult for buyers.

When it comes to VA loans there is no minimum score requirement. This being said, some lenders may still request a copy of your credit score in order to assess how much of a risk you are. Because of this, it’s recommended you have a score of 580 or more, though it is not an eligibility requirement.

The VA program will look at your credit history for the last year, so it’s important you haven’t filed for bankruptcy or had a collection marked on your credit score. As long as you have relatively good payback standings and haven’t had any problems, you’ll be good.


Your debt to income (DTI) ratio often plays a huge role in the determining of your mortgage. For most conventional loans, this ratio is capped at 36%. For VA loans, however, it’s around 41%. Depending on the lender you contact, they may permit a higher ratio, though you shouldn’t always rely on this. 


Most mortgages will require you to get private mortgage insurance. The cost for this is added on top of your mortgage payment and is often raised if you’re unable to provide a 20% down payment. This makes paying for a mortgage much more expensive. 

While not all conventional loans require private mortgage insurance, all FHA mortgages require it. When it comes to VA loans, however, private mortgage insurance is never required!

As VA loans are backed by the government, lenders don’t require you to pay for private mortgage insurance in addition to your regular mortgage payments. All the money you would have otherwise spent on insurance can go directly into paying off your loan, saving you thousands of dollars.


Mortgages typically have fairly high interest rates, especially if you don’t have an excellent credit score. While refinancing may help you switch to a loan with a lower interest rate, you won’t be able to do this right away and you’ll still lose quite a bit of money simply by having to pay so much in interest.

VA loans normally have lower interest rates than other mortgage types. This is again due to the loan being backed by the federal government.

While the average interest rate for conventional loans is anywhere between 3.5% to 4.5%, a high VA loan interest will hover around 3.5%. Of course, this will vary from lender to lender, but on average, you’ll have lower interest rates with a VA loan than you would with another type of loan.


In some cases, lenders will require you to pay an extra fee if you are able or willing to pay off your mortgage before the term ends. This can be discouraging for those who want to either refinance or pay in full for their loan.

If you are able or willing to pay off your mortgage in full, a VA loan will not penalize you.


Qualifying for a mortgage can be a difficult and long process. You’ll be asked to provide multiple documents and even if you do, you may still be denied. Even pre approval may be revoked and you’ll find yourself back at square one.

VA loans are much easier to qualify for. Eligibility requirements can be found on the VA website along with more helpful information about applying for a certificate of eligibility and what to do if you don’t meet the requirements. There’s also a phone number provided at the bottom if you have any additional questions or need some extra assistance.


If you’ve previously taken out another type of loan, VA loans can be used to refinance your current loans. When you refinance a previous loan into a VA loan, you’ll benefit from all the advantages mentioned above and won’t have to worry about managing multiple loan types.


VA loans are there to help former and active-duty military members. If you qualify, it’s certainly worthwhile to look into the option and take advantage of it. Even if you could easily qualify for a conventional loan, VA loans come with so many other benefits that it makes the most sense for you to take advantage of it anyway.

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