Military families across the country are finding now to be a great time to buy a home using their VA home loan benefits. Here are 3 sound reasons to buy a home now with a VA loan:
1) No Money Down
While conventional borrowers have to come up with as much as 20% cash upfront to buy a house, veterans can keep expecting zero down payments with VA loans. The lending climate remains tough as banks try to prevent another mortgage crisis like the one in 2008. Stricter qualifying and higher down payments are measures many lenders take these days. VA-approved lenders are different. The VA home loan program is a benefit for dedicated military service. Since the U.S. Department of Veterans Affairs guarantees approximately 25% of each VA home loan, lenders can be offer easier terms. No down payment, easier qualifying and no monthly mortgage insurance premiums are just some of them.
2) Low Interest Rates
Since mid November 2011, mortgage interest rates have been hovering at or below 4%. As history will show, interest rates haven’t been this low in about 50 years. A $250,000 VA mortgage at 4% would cost a VA-eligible borrower $179,674 in interest over 30 years. Compared to 6%, the rate of just a few years ago, a borrower would pay a total $289,595 in interest on the same loan amount. A difference of just 2% can save nearly $110,000. Many VA borrowers who can afford it should look into a 15- or 20-year VA loan to save significant more money in interest and build equity faster.
3) Low Housing Prices
According to the Standard and Poor housing prices index, the cost of homes is currently at 2003 levels. Additionally, housing prices haven’t seen a yearly increase since 2006. Also, there are more foreclosures and short sales to choose from than in the past. These are typically priced to sell and can be bought for less than market value. Buying a home at today’s low prices can often cost a military family less in monthly payments than rent.
If you need more reasons to use VA home loan benefits, talk to a seasoned professional.