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    If you’re a US military service member or veteran, then you’re likely aware of VA loans — as well as the perks they offer for qualified homebuyers.

    With no down payments and capped closing costs, they’re often the most affordable mortgage on the block.

    But these aren’t the only advantages a VA loan comes with. In fact, if you’re planning on buying or selling a home in the near future, there’s another big one you need to know about: Assumption

    VA Loans are Assumable!

    It’s not talked about much, but there’s one major differentiator between VA loans and some other mortgage loan options out there — and that’s their assumability. Most government-backed loans, like VA loans, FHA loans, and USDA loans are assumable.

    To put it simply, VA loans can be assumed by another party, meaning if you buy a home that’s mortgaged with a VA loan, you can take over that loan (interest rate and all) as-is. Later on, if you sell that home, a new buyer can assume that loan in your place.

    It’s a major perk that can make a home more marketable and allow for a quicker, easier sale. What are the Advantages to Assuming a VA Loan?

    What are the Advantages to Assuming a VA Loan?

    Assuming a VA loan (FHA or USDA loan) can also have potential advantages for buyers, like:

    • Lower interest rates (especially if the loan was originated in a low-interest time period)
    • A faster closing process
    • No closing costs 
    • No appraisal required
    • No loan underwriting
    • No down payment in some cases. There may be a down payment required if the value of the home has risen — then the buyer needs to pay the difference between what is owed and the value.
    • Allows VA funding without the buyer being a qualified veteran or military member

    Are There Additional Perks to Assuming a VA Loan?

    For eligible veteran buyers, there’s also another perk: reduced VA funding fees.

    A typical VA loan comes with a 2.15% funding fee attached to it. When you’re assuming an already existing VA loan, the funding fee drops to a mere 0.5%. Not only is it less in interest, but because it’s on a smaller loan balance (you pick up where the seller left off, balance-wise), it means less spent on interest over time, too.

    Are You Considering a VA loan?

    VA loans are one of the most affordable ways to buy a home — and Americans seem to be taking notice. The number of VA mortgages jumped 2.3% in September 2019, with millennials leading the charge. VA loans for the cohort rose 14% over the same time period.

    Do you want to join them in using this powerful mortgage loan option? Then reach out to Embrace Home Loans now. We’ll walk you through the process and help you figure out if you qualify.

    Your mortgage options for a smooth journey home.

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