If you’re an honorably discharged veteran of the U.S. Armed Forces – any branch – you could qualify to use a VA loan to buy your next home in Aspen. You may already know about some of the benefits associated with using a VA loan, but here’s a quick rundown of the five that make these loans incredibly popular among veterans.

5 Benefits of Using a VA Loan to Buy a Home in Aspen

Your VA loan benefit is guaranteed by the U.S. government provided you meet the right criteria (such as having been discharged under honorable conditions and serving a specific period of time). Some of the most popular aspects of VA loans include:

  1. More lenient loan requirements
  2. The zero-down-payment option
  3. Limited closing costs
  4. No private mortgage insurance requirement
  5. No early payoff penalty

Here’s a closer look at each.

VA Loan Benefit #1: More Lenient Loan Requirements

When you apply for a regular mortgage, a lender looks at your credit score to determine whether you’re a good candidate to borrow money. With a VA loan, lenders still look at your credit score – but they’re not allowed to use it as the sole determining factor in whether you qualify for a loan. The law requires lenders to look at your whole financial picture before making a lending decision.

The debt-to-income ratio for VA loans is often more flexible than it is for conventional mortgages, too. These two leniencies make it easier for someone with less-than-perfect credit to qualify for a home loan.

Related: Rent or buy in Aspen? Here’s what you need to know

VA Loan Benefit #2: Zero Down Payment

When you buy a home with a VA loan, you don’t have to make a down payment at all. You can finance the entire price of the home. However, that doesn’t mean you shouldn’t try to come up with a down payment. The more you can come up with now, the lower your monthly mortgage payments will be.

Remember, too, that although you don’t have to come up with a down payment, you’ll still be responsible for paying for things like:

  • A home appraisal
  • Credit report fees
  • Loan origination fees
  • Recording fees
  • Surveys
  • Title insurance


VA Loan Benefit #3: Limited Closing Costs

The VA limits how much lenders can charge you for closing costs. Additionally, the VA won’t let a lender charge you more than 1 percent of the home’s purchase price to cover the costs of originating and underwriting the loan.

Related: Can you negotiate closing costs when you buy a home?

VA Loan Benefit #4: No Private Mortgage Insurance Requirement

With a conventional loan, lenders can require you to come up with a 20 percent down payment or pay for private mortgage insurance, or PMI. You’ll have to continue paying PMI until you’ve built at least 20 percent equity in your home.

So why do lenders do this?

Private mortgage insurance protects the lender if you fail to meet your obligations. If you walk away from the house while you still owe money on it, the insurance kicks in and helps minimize the lender’s losses.

Not so with a VA loan, though. The VA forbids lenders from making you pay for private mortgage insurance, so even if you don’t have a down payment at all, you won’t be forking over your hard-earned cash to a private mortgage insurer.

Related: The ultimate walk-through checklist for touring Aspen homes for sale


VA Loan Benefit #5: No Early Payoff Penalty

There’s no penalty for paying off a VA loan early – unlike the one you’re likely to have to pay if you don’t use a VA loan. Lenders would rather that you paid your mortgage off over 30 years; that translates into a longer period during which they can collect interest. However, on a VA loan, you could pay it off the day after you get it without paying a “prepayment penalty.” It’s up to you to make extra payments – and lenders can’t charge you a premium for doing so.

Are You Selling or Buying a Home in Aspen?

If you’re ready to sell your home in Aspen, Woody Creek, Basalt, Carbondale or Snowmass, we may be able to help you.

Get in touch with us right now to find out how much your home is worth – and discover how we’ll be able to help you sell it quickly and for top dollar.

If you’re also looking for a home for sale in Aspen or a nearby community, check out our listings by price:

$200k to $300k

$300k to $400k

$400k to $500k

$500k to $600k

$600k to $700k

$700k to $800k

$800k to $900k

$900k to $1 million

Over $1 million