Which of the following is NOT an advantage of VA loans?

VA loans offer numerous benefits to eligible veterans and active-duty service members, making them a popular choice for home financing. One of the key advantages is the ability for borrowers to obtain 100% financing, meaning they can finance the entire purchase price of the home without needing a down payment. Additionally, VA loans often have more lenient underwriting requirements compared to conventional loans. This flexibility helps a broader range of individuals qualify for home loans.

Furthermore, VA loans typically do not have prepayment penalties. This means borrowers can pay off their loans early without incurring additional fees, making it easier to refinance or sell without a financial burden.

The assertion that there are no closing costs is not entirely accurate. While it is true that VA loans often have specific provisions regarding closing costs—such as caps on what lenders can charge—it's not correct to claim that there are no closing costs associated with VA loans. Borrowers may still face various fees that can add up. Hence, it is important to understand that while VA loans provide significant advantages, assuming there are no closing costs could lead to misconceptions about the true costs involved in obtaining financing through this program.