Financial Freedom for Veterans: The Benefits of VA Loans in Building Wealth

Being financially free as a veteran is an American dream. Real estate is one way to help you secure the financial freedom you want when you don’t have a lot of capital of your own. 

As a veteran, you know how it feels to move from one military housing unit to the next, gaining little to nothing in equity but spending hard-earned money on rent month after month, year after year. When you’re ready to commit to permanent housing so you can provide a home for yourself and your loved ones, it’s about more than securing a roof over your head. It’s about building wealth as well. 

One way to accomplish building lasting wealth for you and your family is by securing a VA loan. What is a VA loan? How do you obtain one? How do you qualify for this type of loan? Most of all, how can the benefits of a VA loan lead to building wealth? The more you know, the more you can understand how this investment opportunity made exclusively for veterans, active military members, and their spouses can work out for you.

What Is a VA Loan?

A VA loan is a specialty home loan reserved for a specific type of citizen. A VA loan is not the same as a traditional home loan and differs from a first-time homebuyer loan as well. It’s a loan designed for active military individuals and their families and extends to retired and veteran military personnel as well. It enables veterans to get into homeownership in an easier, more realistic fashion. 

How Do You Obtain a VA Loan? 

Are you active military status or a military vet? Are you married to a veteran or someone in the military? If so, then you can obtain a VA loan. If you can obtain a certificate of eligibility, you’re on your way to being able to apply for a VA loan of your own. 

How Do You Qualify for a VA Loan? 

One of the great things about a VA loan is the less strict application requirements it has compared to other types of home loans. For example, you don’t need a very high credit score (but it does help to take measures to raise your credit score before you apply). 

You simply need to bring in the various forms of income you have to apply for a VA loan and to see how much house you can afford, along with legal identification. Your VA loan lender will walk you through the process of obtaining a VA loan and make sure you bring all the proper documents with you when you apply. 

How Can a VA Loan Lead to Building Wealth?

Investing your money into something where your money can grow is considered building equity, especially when it comes to real estate. If you secure a VA loan, you can use the loan to purchase various types of properties, including manufactured homes, single-family homes, condominiums, or even multi-family units. Here are ways a VA loan can lead to building wealth for you. 

Building Equity

In most cases, buying a home will help you build wealth as your home will grow in value over time. You can use the capital you gain in your home to either renovate or add to your home, pay bills, or make healthy investments to help your money grow even more. Rent doesn’t build you the same equity homeownership does, so consider using a VA loan to buy a home and help you stretch your dollars. 

Putting More Mone in Your Pocket

With every home loan comes a mortgage payment, down payments, closing costs, taxes, and more. How can getting a VA loan, then, put money in your pocket? Here’s how. 

Giving You A Lower Interest Rate

The lower the interest rate on your mortgage, the lower your mortgage payment is each month. It also means more of your hard-earned dollars are going towards the principal of your loan and not its interest. This builds your home equity by reducing the amount you owe on your VA loan. 

Eliminating Your Down Payment

Most home loans require a down payment from the homebuyer, and the down payment cost varies depending on the price of the home. This can mean a large sum of money out of pocket, just to buy a home with a loan attached to it already. A VA loan does not require you to have a down payment for your home, which means you can free up your budget for investment purposes, to put into savings, or to put towards more real estate ventures. 

Allowing Access to Wealth-Growing Housing

You can buy a multi-family unit with a VA loan, which you can then use to build wealth by renting units out. Speak with your VA loan lender about any restrictions that may be associated with this type of homeownership. 

Reducing Closing and Other Costs

A VA loan gives you the advantage of being able to reduce the closing costs associated with your loan. This means a lower loan amount in the end so more of your money goes towards your loan and not closing costs. While there may be an origination fee associated with your VA loan, it can be buried into the total value of the loan so you still don’t have any upfront costs. 

Building Wealth with a VA Loan

If you want to get into real estate as a veteran, then a VA loan can help you not only get into a home but build wealth as well. Explore several avenues for growing wealth as a veteran.