What Are the Three Best Features of the VA Loan?

One of them is really like two in one. Then we’ll talk about number two. And the last one is the one that can save you money and really help you pay your home off early, if you choose to.

1. No Private Mortgage Insurance (PMI) — Even With 0% Down

The first big feature of the VA loan is that there’s no private mortgage insurance (PMI), even if you put less than 20% down. In fact, you can go all the way down to 0% down, and there’s still no PMI.

Why is that? The full name of the VA loan is the VA Home Loan Guarantee. That word guarantee is key. The VA doesn’t actually lend you the money—it guarantees a portion of the loan to the lender.

For example, if we originate your mortgage, we’re funding it, but the VA guarantees up to about 25% of any potential loss if you default. That built-in guarantee acts like an insurance policy. Because of that, lenders don’t require PMI on VA loans.

So, whether you’re putting 0% down or 10% down, you don’t have the added cost of PMI. That can be a huge monthly savings compared to conventional loans.

2. More Competitive Interest Rates

The second major benefit is that VA loans often come with more competitive interest rates compared to conventional loans.

A common concern I hear is: “If I use a VA loan, isn’t my interest rate going to be higher?” The answer: No, it shouldn’t be.

Here’s why: Investors actually pay more for VA loans on the secondary market. That means lenders make more money selling a VA loan than a conventional loan at the same rate. Because of that, VA loans should be priced better.

Unfortunately, some lenders don’t pass that savings on—they keep the extra margin. But lenders like us who streamline VA loans are able to pass that through, which results in lower interest rates for veterans and service members.

The difference can be big. Sometimes it’s just a quarter of a percent, but I’ve seen spreads as wide as 1–1.5%, and in rare cases even 2%. For example, instead of a 7% conventional rate, you might get 5.5% on a VA loan. That’s a major long-term savings.

So, if you’re not being offered a better VA rate, make sure you’re working with a lender who truly understands VA lending.

3. Streamlined Refinance – VA IRRRL

The third major feature is the streamlined refinance, officially called the Interest Rate Reduction Refinance Loan (IRRRL)—often nicknamed the “VA IRRRL”

This is one of the most powerful long-term tools of the VA loan. With an IRRRL, you can refinance to a lower rate with:

• No appraisal

• No income documentation

• Usually just a soft credit check

As long as you can drop your rate by at least 0.5% and 210 days have passed since your first mortgage payment, you may qualify. VA also requires the refinance to recoup costs within 36 months, though in most cases, it’s much faster.

What makes this so impactful is how it ties into what we call our “Client 20-Year Vision”—having a home paid off or nearly paid off by retirement.

Here’s how: if you refinance through an IRRRL and save, say, $200–$300 a month, you can apply that savings directly to your principal. That accelerates your payoff, sometimes chopping years off your mortgage while keeping your monthly payment about the same as it was before.

We even use a tool called Rate Radar that tracks when our clients become eligible for a VA streamline refinance. That way, we can let you know the moment you can save money and pay off your home faster.

Recap

So, what are the three best features of the VA loan?

1. No PMI — even with 0% down.

2. More competitive interest rates — lenders get paid more for VA loans, so you should too.

3. Streamlined refinance (IRRRL) — a fast, low-cost way to lower your rate and pay off your home early.

My name’s Evan Kaufman. I hope this helped explain the three big benefits of the VA loan. Take care!