Why Being a VA Buyer is So Advantageous
VA loans are a great option for eligible military buyers. I love working with VA buyers, and as long as we can find a home in good condition(VA requires this), and/or a condo on the VA approved condo complex list- it’s usually smooth sailing. Here’s a quick snapshot showcasing the VA loan benefits:
Who is eligible for VA financing?
A veteran is eligible for VA financing if he/she served on active duty in the Army, Navy, Air Force, Marine Corps, or Coast Guard and was honorably discharged after 24 continuous months of active duty, or the full period for which called, or ordered to active duty, but not less than 90 days (during wartime) or 181 continuous days (during peacetime).
3 reasons why VA financing is the #1 loan program
1. VA buyers can purchase with $0 down
While all the different loan products in our market seem to be chopping and changing every week, VA financing still stands as one of the best loan products out there. For example a VA buyer can finance 100% of the home’s value and purchase with $0 down. Eligible veterans are allowed to take out a mortgage for up to $417,000 or the County limit as designated by the VA. Also VA financing is still the only loan program out there that allows 100% financing, as the FHA still requires a 3.5% down payment and most conventional loan programs still require anywhere from 5 to 20% down payments depending on the credit profile of the buyer, which is effectively putting home ownership out of reach for many first time home buyers.
2. Easier Qualification rules for VA buyers
Most banks have easier qualifying and credit guidelines for VA buyers. Because many first time buyers typically don’t have a lot of established credit, getting qualified for a conventional loan can be difficult. Most VA lenders only need a 620 credit score to offer 100% VA financing whereas FHA and Conventional financing now require higher scores. Also all VA lenders allow a buyer to qualify up to a 60% debt to income. (Remember Fannie Mae has capped a lot of conventional loans at a 45% Debt to income.
3. VA Buyers Pay no Mortgage Insurance
One of my favorites, and another huge advantage for VA buyers is that they do not have to pay any mortgage insurance (MI) on their loans, as these are backed by the government. Remember conventional loans require mortgage insurance if you put down less than a 20% down payment, and pretty much all FHA loans require mortgage insurance also.
*VA buyers in CA
With over 2.3 million veterans in California alone and with a large percentage of these based in San Diego, this is a great opportunity for VA buyers to get into the market.
Source: Michael Deery, http://www.citywidefinancialcorp.com/