Buying a home is a big deal for anyone, regardless of their age, location, and financial situation. But there are special home buying considerations, particularly for veterans. Veterans have some distinct advantages when buying a home, but they also face some disadvantages. If you are a veteran looking to purchase a home, now is the time to contact an experienced mortgage company Las Vegas so that you are aware of your options and opportunities for navigating the real estate market.
Perhaps you have previously rented a home or even lived with a family member or friend. However, owning a home provides veterans with several benefits.
Some advantages of homeownership include:
- Payment stability
- Building equity
- Freedom to design and decorate
- Credit-based opportunities
- Tax advantages
For starters, owning a home provides you with payment stability. Mortgage brokers in Las Vegas recommend that you get a fixed-rate mortgage, which is a mortgage with a locked interest rate. The principal rate of the loan will remain the same as well. That translates to predictable monthly payments that are not subject to change throughout a loan’s lifetime. Most fixed-rate loans have a lifespan of 30 years. Another advantage of these loans is that you can make higher payments each month if you feel comfortable doing so, which can shorten the loan’s lifespan even more.
Another advantage of owning a home is that it builds equity. Each loan payment that you make puts you closer to fully owning your home. Ultimately, you can leverage your equity by borrowing against it or benefiting from a solid return if you decide to sell your home in the future. Equity can be a great advantage to homeownership, depending on your long-term goals and your situation.
A major bonus of owning your own home is that you have the freedom and flexibility to design and decorate. Perhaps you have always wanted to start a garden in the back yard, or you’ve always envisioned having a bright red front door. Homeownership opens up a world of possibilities when it comes to decorating as you please.
Even if you choose a government-backed loan, such as one administered by Fannie or Freddie, you are still subject to approval based on your credit score. Most lenders in the private sector look for a FICO credit score of 750 or higher. Many government-sponsored loans will accept applications from individuals with a much lower score. Even if you qualify for a VA home loan in Las Vegas on a less than stellar credit score, you are not necessarily better off. Lenders who allocate loans to individuals with lower credit scores will still take measures to protect themselves financially in case the borrower defaults. That means you might get hit with higher interest rates, which ultimately makes your loan more expensive in the long run. You may also have to pay for mortgage insurance, which can also add on significantly to the cost of your monthly payments. If your credit score is not currently at a level you’d like, another reason to buy a home is that it can improve your credit rating. Lenders prefer to see that someone owns a home rather than rents, which means they are more willing to give you a favorable rate. Even if your credit score is low when you buy a home, making your payments on time can improve your credit score and instill confidence in your lender.
Tax advantages are another benefit that accompanies homeownership for veterans. If you’re wondering what kind of tax benefits you might get from owning a home, be sure to contact experienced mortgage brokers in Las Vegas, as tax advantages vary widely based on each individual’s situation. A professional can help you determine what tax advantages you might be able to get from owning a home, such as a tax deduction on your property taxes. You might also get a tax break on your mortgage insurance payments and other costs associated with owning a home.
VA Loan Benefits
There are many types of loans available to prospective homeowners. Fortunately, veterans are eligible for exclusive loans that are not available to the general public. These loans, which are called VA loans, make it easier for veterans to purchase a home and secure financing with no down payment. Veterans can qualify for VA loans even if they have a lower income and credit score than is typically required to obtain a conventional loan. Furthermore, a VA home loan Las Vegas helps you avoid private mortgage insurance (PMI) payments, as the VA guarantees at least 20% of your loan and usually more, which in turn lowers the risk to the lender. Other advantages of VA loans are that they do not require a down payment, they have low-interest rates, and they are easy to refinance.
State Loan Programs
Not all veterans qualify for federal VA loans. However, many states offer their own benefits for veterans looking to secure a home loan. Alaska, for instance, offers several loan programs for veterans through the Alaska Housing Finance Corporation. California also offers loan assistance for veterans through CalVet Home Loans, which provides good rates for first-time homebuyers and can even provide a rate lower than the market price for some veterans.
Home Owner’s Insurance
One of the disadvantages of getting a loan if you’re a veteran is that you are required to also purchase home insurance. While home insurance can be expensive, the good news is that many insurance companies offer discounts to veterans. No matter which company you end up with, be sure to shop around and compare rates first to ensure you are getting the best deal available.
Homeownership can be rewarding for veterans in many ways. From having the simple luxury of designing and decorating a home as you’d like to building equity and improving your credit score, there are many advantages of owning a home. Contact a reputable mortgage lender today for assistance with buying a home.