5 REASONS VA LOANS ARE BEING ISSUED AT A RECORD PACE

For those wanting a competitive mortgage program requiring as little cash to close as possible, the VA loan wins that contest hands-down. Of course, there are eligibility requirements as the VA loan is primarily reserved for veterans of the armed forces. The VA mortgage has become increasingly popular with this segment of borrowers and in 2015, there were more than 631,000 VA loans issued, a staggering 19 percent increase from the previous year. What�s driving this demand?

Myths Busted. Perhaps the biggest reason is the quelling of two specific myths regarding VA loans. It used to be that it took forever to obtain a VA loan approval. That�s because the VA issued the approval directly as well as handled all appraisal duties. That has changed over the years and today approved VA lenders do all the work and VA loans take no longer than any other type of mortgage. Second, since the veteran is restricted from paying certain closing costs, sellers were under the impression they were responsible for these fees. They�re not.

Zero Down. It�s also easier to close on a VA loan than perhaps any other because the VA loan doesn�t require a down payment. This means little or no waiting time coming up with funds for a down payment plus closing costs.

Low Cost. Veterans are limited to the types of fees they can pay. For example, common lender fees such as underwriting or loan processing fees cannot be paid for by the borrower. When you combine a no down payment loan and limited closing costs, a veteran can buy a home sooner rather than later.

Relaxed Credit. While the VA doesn�t specify a minimum credit score for a VA loan approval, a common minimum score for lenders is 620 and sometimes even lower if the veteran can document the lower scores are the result of an event beyond the borrower�s control.

Streamlined Refinance.  When it�s time to refinance, the VA streamlined refinance loan is perhaps the easiest, least documented program around. No appraisal, no credit report and no employment verification.

As the VA loan continues its growth and becoming more well-known we can expect this special home loan benefit to expand even further. For those who qualify, there is no better program in today�s environment for a loan with as little cash to close as possible.

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