2010 is shaping up to be a good year. The economy is beginning to rebound and, according to most financial experts, most of us should begin seeing the benefits of a more stable and productive marketplace in the next several months.
The housing market will most likely rebound for sellers, with home prices increasing in addition to demand. But what does this mean for home loans over the next year?
Chances are, the market will see a slight increase in all loans, including the conventional type which often require a twenty percent down payment and have stringent credit requirements. But alternative type loans, like VA loans for example, will most likely continue to increase exponentially in popularity for several reasons.
Unbeatable Terms
VA home loans provide veterans with fantastic loans with great terms. Qualifying veterans will not only be permitted to participate in the VA’s zero down payment program, but VA loans also carry fewer credit requirements than many traditional programs and even veterans with credit problems or bankruptcy can qualify for the program provided that they’ve maintained good credit in the past several years.
Competitive Interest Rates
The VA home loan program is able to offer interest rates that are often a half to a full percentage point lower than traditional loans provided through banks and other lending institutions. Additionally, the reduction in percentage rate is not accompanied by the presence of mortgage points, a flat VA funding fee that borrowers pay when the loan is issued in exchange for a lower rate. The lack of points and the lower rate can mean that borrowers can save nearly a hundred dollars a month (based on loan value) with a VA loan rather than a loan obtained through a traditional program.
Government Backed Security
One of the greatest assets of the VA loan program is its government backing. Administration by the federal government means that the VA can provide secure and trustworthy loans to its borrowers, and in turn, borrowers need not worry about predatory loan programs or be concerned that their loan has hidden fees or unfair terms. Governmental backing also means that loans provided under the VA are less risky for investors and lenders, which makes the program’s exceptional credit terms, down payment program, and low interest rates possible.
If you’d like to learn more about the Department of Veterans Affairs or the VA home loan program, please visit www.va.gov
in Austin we are seeing quite a bit more VA’s, and lenders are really having to hone in their VA skills – I think you’re dead on in your assessment. The first 7 years in real estate I never did one VA loan – this year alone I’ve done 2 or three.