It seems that recently there has been a push to get veterans to take advantage of their VA loan to help them buy a home. If you are in the real estate business and tend to shy away from these essential loans based on the rumors you have heard, you are missing out on a considerable share of the buying public.
Tackling the Myths of VA Loans
One of the most common reasons given for not wanting to deal with VA loans is merely a lack of understanding. There are many myths regarding dealings with the Veterans Administration, most of which would lead any sane person to avoid them. Among them are:
VA will only loan small amounts– NOT true; the VA offers loans of up to $1.5 million
VA loans take forever to close– NOT true, a VA loan typically closes in less than 30 days because the lender is allowed underwrite the loan and fund it without actually involving the VA
VA loans have very strict underwriting rules– NOT true, VA loans are among the most flexible available.
VA loans are intended for the borderline buyer– NOT True, VA loans are considered full-qualifying loans in that the borrower must meet certain standards for income, credit, and assets to acquire the loan.
Veterans default more frequently– NOT true, in fact, quite the opposite is true in that few vets default on their loans than people with conventional loans.
The Many Benefits of VA Loans
When you are talking to a veteran who is interested in buying a home, but who doesn’t fully understand the benefits of their VA loan, here are six of the most important benefits of using this type of loan:
No Downpayment– Perhaps one of the more important benefits, not having to come up with thousands of dollars for a down payment can help you to buy your dream home sooner.
Mortgage Insurance Not Required– For conventional buyers who manage to finance without the full 20% down on their home, most will have to buy mortgage insurance. This is on top of the mortgage payment and homeowner’s insurance, adding an extra monthly payment you must make until you reach the 20% mark. It could add as much as several hundred dollars to your monthly bills. With a VA loan, this type of insurance is not required.
More competitive interest rates– working with the VA security blanket allows many lenders to offer better interest rates.
Reduced closing costs– although all mortgages come with closing costs, the VA has put strict limits on what you have to pay, making VA loans a desirable option.
Fewer Credit Requirements– in today’s conventional mortgage market the need to have excellent credit has never been more critical. With the VA past bankruptcies, short sales, foreclosures, and low credit scores are not necessarily a disqualifier.
Your VA loan benefit is for life– Once you have successfully qualified for access to the VA loan program, you are qualified for life. You can use the benefit as many times as you like throughout your life and have more than one VA loan at a time.
Now that you have a little more information at your fingertips, you may find yourself striving to sell more homes using this outstanding benefit, thereby helping more veterans buy the home of their dreams.