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Veterans have benefits awarded exclusively to them for their dedication and service, including disability and education compensation, career training, health care, and even home loans. However, with federally-funded home loans, there is more than one option. When it comes down to it, what is the best -- FHA loans or VA loans? This article will help you understand and make an informed decision on which loan is best for you.
An FHA loan is a US Federal Housing Administration mortgage insured by the government and provided by an FHA-approved lender. The requirements for FHA loans are not that hard to obtain, especially when it comes to the credit score. For example, some of the requirements for FHA are:
As for the VA loan requirements, believe it or not, they are easier to obtain than the FHA requirements. A VA loan is a mortgage guaranteed by the United States Department of Veterans Affairs, and some of the requirements are:
As much as everyone would like both types of loans to be perfect, each has its advantages and disadvantages. It's essential to look at them before making a final decision. Some of the FHA advantages and disadvantages are:
The main difference between FHA loans and VA loans is the PMI and MIP. When it comes to Private Mortgage Insurance (PMI), VA doesn't have PMI. However, FHA loans require you to pay the government equivalent of PMI, called MIP (mortgage insurance premium).
After a deep analysis of both loans and looking at the advantages and disadvantages/the requirements, a VA loan comes out on top for veterans looking to purchase a home. With no down payment, PMI, easier credit, and lower interest rates, VA home loans are more comfortable and accessible than FHA loans. Still wondering if the property qualifies for a VA mortgage? Contact us today to get all your questions answered.