A VA loan is a great choice for a service member who is ready to own property but might not have the required down payment deposit. If you don’t have a down payment, you’ll need to carry FHA insurance. The Federal Housing Administration (FHA) is part of the Department of Housing and Urban Development. It provides mortgage insurance on loans made by FHA-approved lenders.
In this episode of From Military to Millionaire, David Pere talks about his $10,000 mistake and how to avoid it. Hint: It has to do with FHA!
Benefits of the VA Loan
The VA loan comes with many benefits. First of all, you don’t need a down payment of any kind. This means you can buy a home with no money saved and pay your mortgage instead of paying rent so that you end up with equity. You can also do what is known as house hacking and purchase up to four units with the VA loan. In house hacking, you rent out the other units and typically end up with your renters paying your mortgage. You not only live for free, but you end up with equity as well.
Another benefit of the VA is the 100 percent refinance option. You can also use the VA loan more than once, buying another home after you’ve either lived in your initial home for at least a year or are relocated by the military. You can keep using the VA loan until you’ve maxed out the allowable amount for your area.
Some of the best benefits of the VA loan are its safeguards. The strenuous inspection process by vetted professionals means that you know every little thing that’s wrong with the property before buying. The Department of Veteran Affairs will help you out in the case of foreclosure. The veteran mortgage is also assumable, so another veteran could take over your mortgage payments if needed. The VA renovation loan is also extremely worthwhile.
Finally, with the VA loan, you don’t have to pay private mortgage insurance, you get good closing costs, and the funding fee can be wrapped into the loan or waived if you’re a 10 percent disabled veteran. The only downside of the VA loan is that not enough service members and veterans know about it.
So What Was David’s Mistake?
We won’t spoil it here – you’ll have to watch the episode to find out!
David Pere is an active-duty Marine who is on a mission to educate the military community about financial readiness. Most people hear that term and roll their eyes, but Pere wants everyone to know that readiness can be achieved – without a lot of effort. He teaches personal finance and real estate investing to service members to help increase savings and increase their chances of achieving financial freedom.
Want to learn more about Pere? Check out the Military to Millionaire website, and connect with him on Instagram or Facebook. Subscribe to his YouTube channel here! Take a look at David’s book – The No B.S. Guide to Military Life here.
Looking for more ways you can be financially strong? Check out what’s new on our Mighty Money page.