I have been in the mortgage industry since 1997 and more importantly I have been dealing almost exclusively with veterans and VA home loans since my very first days as a mortgage loan officer. I have seen a lot of changes in regards to veteran home loans, VA mortgages and other financially related VA products over these years. I can tell you right now that one of the current changes that oddly enough has been a positive change in light of all the negative news hitting mortgages lately, is the fact that prospective-veteran home owners are currently in the best position they have been in years!
As many of you are aware, our country’s housing sector has seen huge pricing and value deterioration from 2007-2009 and we are still not sure if we have bottomed, though many feel we are close. There are many reasons to blame for the housing meltdown: greedy home buyers, shady mortgage people, crazy loan programs, just take your pick. I can tell you that over the years I have been approached by many different angles from many different people, companies and even lenders or banks, trying to convince me to stop doing VA loans and to do this or that loan because I would make more money or because it was a better loan. I am proud to say I never strayed from the VA loan path and it has been one of the smartest decisions of my life. That said, let me get back to the topic or the large decline in US housing prices. For a long time, the average veteran home owner could not afford to buy a home with a VA loan or VA mortgage due to the fact that housing prices were so high that one would have to lie about what he or she made at work, in order to get a home. Sadly enough, many of you may have done that and to do such were forced to do a NON-VA loan and went stated income or some other crazy route and may have bought more than you should have. Gladly enough, many of you kept renting and waited, NOW IS YOUR TIME TO SHINE! Housing prices are back down to good and normal levels, and realistically all other NON-VA loans have been removed from existence or are very hard to get into. (other than FHA loans, which here at LowVARates we gladly endorse and can offer.)
Why the VA loan to purchase property?
A question I love to ask my veteran borrowers is “why not use a va loan?” Interestingly enough there are about 28 million eligible veterans and only about 10% of them have ever used a VA home loan to purchase property. Studies have proven that about 20% of the veteran or military population have never even heard about or are aware of the VA home loan benefits they are entitled to. Veterans, you have done so much for the rest of us that it is frustrating to hear these stats and realize how many deserving veterans are not aware of the VA loan.
Here is a list of my favorite reasons a veteran should use a VA loan to buy real estate:
- 100% financing. This means no money down and many times no money out of your pocket at all since the cost to buy the home can be paid for by the seller. In today’s housing market it is simple to get sellers to give you all sorts of perks and to get all your closing costs paid for.
- Loan is backed by the credit of the US Government. This does not mean your credit does not matter. This means that the VA (US agency) is willing to guarantee your loan to the bank. That said, should you get into some financial bind down the road, the bank and the VA are much more willing to step in and assist to the extent they are able.
- Streamline refinance when rates drop. Many times interest rates may not be as low as you would like when you finally decide to buy a home. This should never matter to a veteran getting a VA home loan. The VA has made it almost free and easy to refinance to a lower rate if and when rates should drop at any time after you close your loan.
- Protection from unscrupulous lenders/brokers. The VA audits its approved lenders and its approved loans and if the loan was done wrong, or if something was charged that was not allowed to be charged, then the VA can and does make the lender or broker refund the money at no cost to the veteran.
- Lower than normal interest rates. In today’s market many banks are offering special interest rates to take a VA loan. Why would a lender do this? Simply put there is a lot of fear out there today surrounding non-government backed mortgages and many banks have decided to try and get many more va loans on their books.
Veterans I urge you to continue your research and to make sure when you do purchase a home, that you use your VA entitlement and use a VA home loan. You will never regret it I can promise you that.