The VA has been providing veterans affordable home loans for decades. Those that have served in the United States Armed Forces and Reserves can qualify for VA loans as a benefit for their service. In October the VA celebrated the issuance of its 20 millionth home loan. With over 20 million home owners having purchased a home, or refinanced, using a VA loan they are a major provider of home loans for people throughout the country.
Since 1944 the VA has been a solution for veterans looking to purchase a home without a large down payment. The VA insures a portion of the mortgage loan so that banks are willing to issue a higher loan amount, or higher loan to value, than they would without the VA guarantee. This insurance acts as a way to decrease the risk associated with giving a borrower a loan without a lot of equity in the property.
As home values have declined more people have looked to the VA to refinance an existing loan. In 2012 the VA had their second best year ever, insuring over 540,000 home loans. Over half of them were refinances. They effectively insured over $119 billion in mortgage loans in 2012 alone. This represents a large increase compared to only $75 billion in 2011. This comes as more mortgage lenders are realizing the benefit of VA loan programs and becoming VA approved lenders.
VA Loan Benefits
- No Down Payment. The VA does not require a down payment. This is fantastic news for people looking to purchase their first home. It can be challenging to save for a down payment and with their no or low down payment options – the VA can be the solution for helping you achieve dreams of home ownership.
- Low Interest Rates. Mortgage interest rates are at historic lows and VA rates are no exception. 30 year fixed rates are under 5% and purchasing a home or refinancing now will save you thousands in interest over the life of the loan.
- Manufactured Homes. People that own, or want to buy, a manufactured home may find it difficult to find a lender interested in issuing the loan. The VA does let borrowers have a manufactured home so it can be an ideal solution.
- Up to Four Units. If you want to purchase a home to live in, and also make money, you can purchase up to a four unit home through the VA’s programs. Just make sure that you are planning on living in one of the units.
- Low Closing Cost. The government has regulations in place to limit the closing cost a borrower pays on a VA loan. That means you could pay less at closing with a VA loan than a traditional mortgage loan.
VA loans are an ideal solution for borrowers looking to purchase a home or refinance. Contact a VA approved lender today to find out how a VA insured loan can help you. Rates are low so now is the best time to buy a home, before home prices continue to increase.