With the number of VA loans increasing 50 percent last year due to more easily accessible financing options than through conventional programs, VA Guaranteed Home Loans notes VA Loans are increasingly more popular, as they help US military members and their families capitalize on huge down payment and streamline refinancing savings.
Additionally, VA-eligible borrowers with credit scores that would deny them conventional loans can receive funding without having to put a cent toward their house’s down payment.
VA Guaranteed Home Loans, a national VA lending network, gives eligible US war veterans and their families the opportunity to cash in on the most cost-efficient down payment mortgaging opportunities and streamline refinancing strategies.
While VA home loans have been helping American war veterans and their families get low-to-zero down payment rates on home mortgages and mortgage refinancing for nearly 70 years, this service couldn’t be more timely. The VA loan program saw one of its best year’s in 2012, with loans increasing by more than 50 percent from the previous fiscal year. The VA also insured its landmark 20 millionth loan last year.
If you are a veteran looking to make a long-term investment in a home, there is no better way to get started than with a VA loan, especially if your budget is such that you’d prefer not to take a huge chunk out of your savings on an immediate down payment.
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But why the marked uptick in loan assistance, one might ask? The reason VA loans are increasingly popular has to do with the ever-increasing restrictions being placed on conventional loans due to recent economic shortfalls.
A Huffington Post article reported that VA loans have increased by more than 305 percent over the last five years, after conventional lenders began issuing stricter policies and making borrower eligibility more difficult in 2008.
While a traditional lender might demand as high as 20 percent on a home down payment, VA loans typically require no money up front, which can be a huge relief for families whose main concerns have been keeping their country and family safe, rather than being able to spend time accruing large savings and worrying about maintaining a great Fico score.
Although the zero down payment option typically covers homes worth up to about $417,000, VA loans can offer insurance on houses worth up to $1.094 million, according to the New York Times. And VA IRRRL Refinancing options can also be secured with zero out-of-pocket cost.
Even the cheapest non-VA refinancing and home buying option, the FHA, is seeing its minimum down payment rates rise to 5 percent of a home’s total cost this year. This means that while a non-VA borrower would have to put down a minimum of $20,000 on a $400,000 home, a VA borrower would put down nothing on the same property.
That said, VA borrowers do need to be aware that loans are insured, not financially backed, by the VA. This means that VA borrowers must go through a traditional lender once they’ve gotten a VA stamp of approval. There is also an overhead cost of 1 to 3 percent of the property’s value that will be tacked on for VA loans, but seeing as it can be negotiated with a lender and paid off in your monthly bill over the course of many years, VA home loans are a good way to go for home buyers and refinancers who see their property as a long-term investment. Most VA loans also require a credit score of only about 620, which is much lower than the average denied score of 669 for borrowers, as noted in a National Association of Realtor’s statement from last year.
“VA loans provide a fantastic opportunity for veterans returning from overseas who are looking to move their family into a home without having to worry about high down payment overhead,” says Brian Maier, Broker/Owner of Raintree Mortgage, a Las Vegas mortgage company specializing in VA Loans. “They’re also a savvy and affordable option for military families looking to save on streamline refinancing.”
VA Guaranteed Home Loans is a national network of pre-approved VA Lenders who specialize in helping veterans and active service members secure mortgage financing through the VA Guaranteed Home Loan Program. To see if you are eligible for a VA Loan, call us at 888-523-0770 to speak with a VA Loan Specialist.