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VA loan down payment: Definition and requirements

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Portions of this article were drafted using an in-house natural language generation platform. The article was reviewed, fact-checked and edited by our editorial staff.VA home loans can be an attractive option for military service members, veterans and eligible spouses looking to buy a home. Unlike other loan programs, VA loans do not typically require a down payment. However, making a down payment can reduce overall costs. Here’s how a VA loan down payment works and what to consider when deciding whether to make one.Not usually. One of the biggest selling points of a VA home loan, which is guaranteed by the U.S. Department of Veterans Affairs (VA), is the lack of a down payment requirement. While buyers with conventional and FHA-backed loans need to come up with a percentage of the purchase price, those with VA loans have a much easier number to hit: zero.It’s important to note that there are exceptions to this rule. If you don’t have full VA entitlement, you might be subject to VA loan limits and need to contribute a down payment. Likewise, if the sales price of a property is higher than its appraised value, you’ll have to make a down payment to cover the gap.Assuming you meet the service requirements for a VA loan, you have full entitlement if:No-down payment VA loans are a benefit for past and present U.S. military members and their families — but there’s also a financial reason for no down payment. As with FHA and USDA loans, the federal government (in this case, the VA) guarantees a portion of every VA loan, which are actually issued by private lenders. This federal backing alleviates the risk a lender takes on when originating a VA loan. The guarantee is at least 25 percent — more than the equivalent of a typical down payment — so borrowers aren’t required to make an additional contribution.There are both benefits and drawbacks to making a down payment on a VA loan. Here’s a look at the pros and cons:The scenarios in which you will have to make a down payment include:

Portions of this article were drafted using an in-house natural language generation platform. The article was reviewed, fact-checked and edited by our editorial staff.VA home loans can be an attractive option for military service members, veterans and eligible spouses looking to buy a home. Unlike other loan programs, VA loans do not typically require a down payment. However, making a down payment can reduce overall costs. Here’s how a VA loan down payment works and what to consider when deciding whether to make one.Not usually. One of the biggest selling points of a VA home loan, which is...

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VA loan down payment: Definition and requirements

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