PenFed Mortgage with Confidence


Understanding Benefits of VA Loans

What you'll learn: Some of the great benefits that VA loans offer


The VA offers mortgages to help eligible servicemembers, veterans, and surviving spouses with the big step of buying a home.

A VA loan is one of many different mortgage types. The U.S. Department of Veterans Affairs backs them, lenders like PenFed provide them. The VA guarantees a portion of the loan so that you can get more favorable terms.

Benefits of VA Loans

When you’re shopping for home loans, you might be wondering, “what are the benefits of a VA loan?” VA mortgages have advantages that other loans don’t. Here are some of the most popular:

Home Loan with No Down Payment

Often, you can get a VA mortgage without putting any money down. That means you can become a homeowner for less money out of your pocket.

Compare the zero down of a VA loan to conventional and FHA options:

  • Conventional loan: The lowest down payment is 3%. On a $300,000 loan that's $9,000.
  • FHA loan: The lowest down payment is 3.5%. On a $300,000 loan, that's $10,500.

With down payments under 20%, both conventional and FHA loans require extra insurance. We'll talk about that next.

Avoid Paying PMI

Private mortgage insurance (PMI) protects your lender if you stop making payments. When you get a conventional mortgage and put less than 20% down, you have to pay PMI. FHA loans require lender protection also. It’s called a mortgage insurance premium (MIP). Having to pay for this extra lender’s insurance may increase your monthly payment.

However, you don’t have to pay PMI for VA home loans even if you have little or no money down. No PMI is one of the benefits of VA loans that may save you money each month.

Low-Interest Rates

VA home loans generally have lower interest rates than conventional and FHA loans. Especially from a lender like PenFed, which specializes in VA mortgages.

When comparing loans, it's smart to compare payments. If the rate is low, but there's extra insurance, you can see how it impacts what you pay each month.

VA Refinance Options

  • The VA's Interest Rate Reduction Refinance Loan (IRRRL) offers low rates.
  • If you’re looking to get a “jumbo” loan or home in higher-cost markets, you won’t be subject to the federal conforming loan limit maximums.
  • Available entitlement and property location will determine the loan amount. Also if your loan amount is in the range of $726,200 to $1,500,000 or more — higher interest rates may apply.
  • You will need to pay the VA funding fee and any refinance costs. These may include an appraisal, tax service, title, transfer taxes, and credit reporting fees. There may be more costs necessary for your specific loan.

What’s Needed to Get a VA Loan?

To apply for a VA home loan, you’ll need to have your DD 214 in hand. Then you can apply for a Certificate of Eligibility (COE). You can do this online via the ebenefits portal on the VA website.

You’ll also need to complete an application for your VA home loan as you would with any other mortgage. So, your credit and other individual items, income, debts, and assets will be a part of the approval process.

Now that you know the significant benefits of VA loans, it’s easy to see these loans can’t be beaten.

To learn more about PenFed mortgages or what option is right for you:


1-800-970-7766 OR

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5


Rates as Low as % APR with flexible use of funds

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5