Which of the following is a key benefit of a VA loan for eligible veterans?
Correct Answer
A) VA loans allow eligible borrowers to purchase a home with no down payment
VA loans are guaranteed by the U.S. Department of Veterans Affairs and allow eligible veterans, active-duty service members, and surviving spouses to purchase a home with no down payment (100% financing). The VA guarantees a portion of the loan, reducing lender risk. While VA loans have favorable terms, closing costs may still apply, interest rates are market-based, and home inspections are not provided free by the VA.
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Related Topics & Key Terms
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Related Concepts
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
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