How to Compare VA Home Loan Terms
Taking out a mortgage is one of the biggest transactions most Americans ever make. When you’re shopping for a mortgage, it’s important to understand your options, and to know how to compare different loans.
The VA loan program includes several different types of loans. If you’ve been exploring veterans mortgage loans and you’re feeling lost, keep reading below to learn more.
Know Your Priorities
One of the first questions you should answer when considering a mortgage is: what is your goal? What are you trying to accomplish? A mortgage is a major decision that should fit into your long-term financial plan. With your new VA mortgage, for example, you might want to move closer to your family, or you might want to take out cash to pay off credit card debt *, or you might want to shorten your repayment term. Once your goals are clear, it’s easier to choose the best mortgage for you.
If You Want to Get Cash
Average home values are rising nationwide. If you own a home, you may want to consider a VA loan refinance to take out cash. With the equity in your home, you could pay off high-interest credit card debt *, pay for college tuition, make home improvements, or take care of your to-do list. Not all refinance loans allow you to get cash.
If you’d like to take advantage of the equity in your home, ask us about a VA cash out mortgage. From 2021 January to October, our customers took out an average of $58,903 in loan proceeds.
If You Want the Lowest Monthly Payment
If your number one priority is having the lowest monthly mortgage payment, you should pay close attention to the mortgage term. “Term” refers to the length of time required to pay off your loan. For example, if a mortgage has a 30-year term, you will pay the mortgage over the course of 30 years, in 360 monthly payments. Typically, a 30-year term has a lower monthly payment than other mortgage terms.
If You Want to Pay Off Your Loan as Fast as Possible
Most homeowners eventually want to be mortgage-free. If you’re interested in paying off your mortgage as quickly as you can, a shorter mortgage term may be best for you. Instead of a 30-year term, you could consider a 15-year mortgage. With a 15-year mortgage, your monthly payment will be higher, but you will pay less interest over the life of the loan compared to a 30-year mortgage. You may also consider taking out a 30-year mortgage, but paying more money towards your principal balance every month. After consolidating debt,* our customers save an average of $600 every month. If you put some or all of those savings towards your principal balance each month, you will pay off your loan in a much shorter time frame than the 30-year term. VA loans have no prepayment penalties, so if you pay more principal on a monthly basis, you can pay off your mortgage more quickly.
Learn More About Your Options
If you’d like to discuss your options and find the right mortgage to fit your needs, call us today to speak with one of our expert Account Executives. Whatever your goal is, it’s our mission to help you get the money you need for your family and home. Call us at 800-995-0374 or get started online right now.