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April 16th, 2018

Posted April 16th, 2018 under Understanding VA Home Loans

Busting Big Myths About VA Loans

Tags: VA home loan myths, credit needed for VA home loan

Busting Big Myths About VA Loans

For veterans, a VA home loan is one of the best ways to purchase a home. Since 1944, it has been instrumental in helping military service members purchase a home, and it's helped more than 22 million do just that.

However, while it has a long history of success, there are still plenty of myths out there that many veterans believe. And some of those veterans actually avoid the VA loan or don't apply for it just because they believe these misconceptions. As such, taking the time to bust some of the biggest myths about it is important.

Myth Number One - It's Not A Great Loan

The truth is simple - the VA loan is one of the absolute best loan options on the market today. It offers numerous benefits including:

  • Lower than average interest rates

  • No down payment

  • Relaxed credit requirements

  • Great terms and conditions

  • Fixed interest rates

In short, if you could design a perfect mortgage loan, it would be comparable to the VA loan. Even the closing costs that a lender may charge is limited by the VA, saving you even more money when you buy a home - while letting you borrow up to $417,000 without having a single dollar as a down payment.

Myth Number Two - You Need Great Credit To Qualify For One

On the contrary, you don't even need good credit. There are actually no credit limit rules in place to qualify, but most VA lenders will prefer a 620 credit score. Still, even those who have bankruptcies could qualify for a VA loan. Simply put, your credit score isn't the main factor in getting a VA loan and it's worth applying even if you've been turned down for loans in the past.

Myth Number Three - It Takes Forever To Close

In reality, VA loans close just as fast as any other type of loan - and they're more likely to close than other loans, including FHA loans. It takes VA and conventional loans an average of 44 days to close, and 70% of VA purchase applications made over the last 90 days went on to close - compared to 61% of FHA applications and 67% of conventional ones.

Myth Number Four - They're Risky Because You Don't Need A Down Payment

Since the housing crash, VA loans have had the lowest foreclosure rate of any kind of mortgage. That's a seven-year run so far, and despite the $0 down payment, the fact remains that VA loans are a safe option. The Loan Guaranty Service's dedication to veterans and making sure that they keep their homes are important, and it's a key reason that VA loans are one of the safest options out there if you're looking to borrow for a home.

Myth Number Five - It's a One Time Only Benefit

This isn't a veteran benefit that you use once and can't ever access again. If you qualify for the VA loan, you can use it time and time again. In fact, some qualifying borrowers may even have more than one VA loan active at a time. And even those who lose a VA loan to a foreclosure could still end up qualifying for a loan again.

A Great Loan Worth Considering

All of the myths above have actually kept veterans from exploring what the VA loan could do for them. The fact is that the VA loan program has helped more than 22 million veterans buy a home, and it's a program that deserves attention from anyone who may qualify. It could be the best path to home ownership for you, too.

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