Military Families Using Veterans Benefits To Buy Homes
The housing market has been exploding lately. It is definitely a seller’s market, with houses getting multiple offers on their first day on the market and sometimes selling for tens of thousands of dollars above the asking price. For those of us who aren’t millionaires, buying a home can be next to impossible right now.
But it’s possible, and military veterans are proof. Many are able to get their foot into the door of this red-hot housing market thanks to their veterans benefits. They are able to buy homes using VA purchase loans, which means they don’t even have to have a down payment.
Typically, home loans require at least a 20% down payment, but VA loans do not require one. This is a huge deal, considering that basic homes can cost $300,000, $400,000, or more. Not having to save up $60,000 or more can be a huge relief, especially since the coronavirus pandemic forced many layoffs. On top of that, no mortgage insurance is required, allowing veterans to save even more money.
VA loans are offered by private lenders and backed by the Department of Veterans Affairs. In addition to not requiring down payments, the rates are also better than conventional loans. For non-veterans, the average interest rate right now for a 30-year mortgage is around 3%. The same loan for veterans is at 2.75%.
Veterans of all ages are taking advantage of VA loans to give them some leverage in this housing market. For those between the ages of 18 to 24, VA purchase loans were up 123% over the previous year. For millennials (those up to 38 years old), VA purchase loans increased by 16% over the previous year. Loans from both generations accounted for 52% of all VA purchase loans so far in 2021. This is a 5% increase from 2020.
This is great news for the economy as a whole. Veterans are finding ways to stop renting so they can buy homes and plant roots in various communities across the country.
However, there are some downsides to having a VA loan. There are a lot of misconceptions about these types of loans, which means home sellers are wary about them. If they have to choose between a buyer with a conventional loan and a buyer with a VA loan, many will choose the buyer with the conventional loan.
But why? Many sellers erroneously believe that VA loans will take forever to fund or there may be appraisal issues. But these concerns aren’t generally true. In fact, VA loans may even close quicker than traditional loans. So sellers should be open-minded and not dismiss VA loans right away.
Learn More About Veterans Benefits
It’s promising that families are able to take advantage of their veteran benefits during a pandemic. With a hot real estate market, buying a home has been hard for many people, but veterans can get into the home of their dreams with no down payment.
If home ownership is a goal, veterans benefits can help. White Plains veterans benefits lawyer Michael Lawrence Varon in White Plains can help you understand your eligibility. To schedule a free consultation, fill out the online form or call 914-294-2145.