Here we are at part five of VA Loans Explained. Because VA loans are backed by the fed, there are benefits you wouldn’t necessarily get otherwise, and that’s in addition to lower mortgage loan rates.

Since VA loans are guaranteed by the federal government, they give you a lot more flexibility. So, if you qualify, or think you qualify, the VA loan is as good as it gets. It is 100% the best loan on the planet to get qualified for. The guarantee gives the lender that extra cushion in something goes awry, and it’s even a more valuable loan on the secondary market. Basically, a VA loan is nearly a golden ticket in the mortgage world.

Here’s the process: The VA backs your VA loan, so it’s partially backed by your VA entitlement. Then the government guarantees it further, so in case of a defaulted home loan, the lender is covered more so than they would be on a typical conventional loan, where they may have less backing or coverage. So, with that bit more cushion and security, the lender can be more flexible with their requirements.

With COVID and the rest of the mess of last year, additional requirements have floated up, especially on jumbo loans. But even with jumbo loans—whether you are borrowing $100,000 or $5 million, a VA loan is a VA loan. It doesn’t require mortgage insurance, it’s guaranteed by the federal government, and the default rate is one-fourth of what we see in conventional loans. (10.4% of all conventional loans actually fail after ratification of the contract, and that was pre-COVID. Who knows what that statistic is now!) VA loans make the process easier overall, and as you can probably tell, I’m a big fan.

Think you qualify for a VA loan and have questions? Let’s schedule some time to talk here.