VA Loans Are Nineteen Million Strong
The VA home loan program’s success can be measured partly in the rate growth and foreclosures. From 2006 to 2010, the number of veterans choosing to get VA-backed mortgages rose by 63 percent. And, of those borrowers with VA loans, fewer were seriously delinquent and fewer homes foreclosed from 2008 to 2010 than any other period in history. Also, VA loans outperformed prime loans with fewer foreclosures and delinquencies according to the Mortgage Bankers Association’s National Delinquency Survey.
While most conventional lenders all but stopped providing mortgages to borrowers without twenty percent to put down, the veteran mortgage program continued to crank out zero-down loans to qualified borrowers. The attractive features of VA-guaranteed mortgages such as zero money down and no private mortgage insurance, low interest rates, and the typical character profiles of the veteran borrower may be attributing factors.
For most VA-eligible borrowers, the no-money-down element of VA loans is the biggest selling point. Most every mortgage program out there requires 3.5 to 20 percent cash down. For VA borrowers, zero down loans help keep savings reserved for financial emergencies.
Almost all mortgage borrowers of late, VA borrowers included, have taken advantage of historically low interest rates. Rates have continuously declined from 2008 through 2010. Interest rates can fluctuate with risk and inflation. One thing is for sure, VA-approved lenders generally offer competitive interest rates that are consistent with the current market. Because all mortgage programs have been experiencing a drop in rates, low interest rates alone cannot be the factor contributing to the VA program’s success.
It may be that the borrower demographic associated with the VA home loan program deserves a closer look. Only active and retired military members and surviving spouses are eligible for VA-backed mortgages. As Secretary Shinseki said of our nation’s military members, “they have an unshakeable sense of responsibility.” Responsible borrowers may be the possible key for fewer delinquencies and foreclosures with VA loans.
The U.S. Department of Veterans Affairs guarantees a portion of each VA mortgage only for eligible borrowers who qualify. The federal backing provides reduced risk for VA-approved lenders who in turn can offer loans for no money down.
One final factor in the success of the VA home loan program has to be the free mortgage counseling that is available to VA borrowers. Included in the U.S. Department of Veterans Affairs’ home loan benefits is access to VA-employed mortgage counselors in 11 Regional Loan Offices throughout the country. These qualified counselors provide financial advice for VA borrowers who may be facing default and/or foreclosure. The counseling has helped many military borrowers get back on track and keep their homes that are financed with VA loans.
VA Secretary Shinseki said of the VA mortgage counselors employed at the Regional Loan Centers that they possess “professionalism and savvy”.
The VA Home Loan Guaranty Program, which began in 1944, has resulted in more than trillion in VA-backed home loans. More information about the success of VA home loans can be obtained by contacting a VA loan professional.
VA mortgages are originated and funded by private lending companies and guaranteed by the U.S. Department of Veterans Affairs. Lenders must ultimately agree to the terms of each loan.
This video explains and dispells numerous misconceptions or myths about VA refinance loans. Have you ever wondered how low your interest rate should be on a VA refinance? Have you ever been told that you should not pay VA loan closing costs? You will enjoy this video.
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