Noteboom The Law Firm

VA Home Improvement Loans Offer Many Advantages

December 2, 2010 - There has been much talk as of late about the many advantages of Department of Veterans Affairs (VA) home loans. A lesser known VA backed loan is known as a VA Home Improvement Loan. As the name suggests, veterans can take these loans in order to make improvements on their existing home. The Federal Government guarantees these loans to those lenders offering upgrade financing, allowing veterans the opportunity to make their current home better.

As with VA home loans, the VA is not the lending agency or the bank supplying the loan. The VA, however, does provide security by guaranteeing the loan will be repaid. Because banks have no risk in making the loans, they are apt to offer more realistic interest rates.

The VA home improvement loan offers veterans many advantages. For example:

• No cash down payments are required;
• No penalties for pre-payments;
• Better mortgage rates;
• Easier qualifying requirements than conventional loans; and
• Increased household energy-efficiency.

The loan does come with restrictions. Veterans can borrow up to $3,000 by simply supplying improvement receipts to the lending institution. Veterans must prove planned improvements will lower their utility bills to borrow over $3,000. Finally, veterans are allowed to borrow up to $6,000 without having their house's value appraised.

Veterans can finance these loans for up to 15 years and can qualify for multiple loans at one time. Most well planned home improvement projects can help increase a home's equity. Qualified veterans have the ability to increase their own home's equity at their fingertips with VA home improvement loans.