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VA loans come with no down payment requirement. Most other home loans, including those from the FHA, have a minimum down payment of at least 3.5% of the purchase price. While 100% financing loans were partly responsible for the housing market crash, the VA still offers these loans in a safer way.
Other home loans require the payment of closing costs like escrow fees, inspection fees, title insurance, taxes, homeowner’s insurance, and more. However, VA loans are structured in a way that’s favorable to the buyer, which means closing costs are covered. The average closing costs are roughly 3% of the home’s purchase price, and a VA loan can help a buyer save a significant amount of money.
If a buyer opts to fund the closing costs, or if the seller refuses to pay them, the VA will cut those costs that are payable by the homebuyer. In traditional home sales, buyers pay a list of expenses, including:
Thankfully, with a VA loan, these charges are not permissible.