VA home loans can help veterans buy in competitive market
What to know about VA home loans
Imagine buying a home with no down payment required, and lower costs. Those are the benefits of VA home loans.
HOUSTON - Imagine buying a home with no down payment required, and lower costs. Those are the benefits of VA home loans. But only 13% of veterans have used them to buy a home.
Home prices and high-interest rates make it hard for many people to buy a home in this market.
But a Houston-area veteran says it was his VA home loan that dramatically lowered the cost of buying his first house.
"I got a little dog that runs up and down the three-story. So I just come home and I come through the garage and I hear the dog clack, clack, going down the stairs and I love it," said veteran Kurt Swalander.
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That's the sound of happiness for Swalander, who used a VA home loan to buy his first house.
"I think this is really the only way I could have become a homeowner as quickly as I did. Before actually even starting my career, I had closed on my house and moved into my house," he said.
VA home loans don't require a down payment or private mortgage insurance, are easier to qualify for, and offer lower interest rates and closing costs.
Bankrate reports the national average on a 30-year fixed rate mortgage fell to 7.83% this week, while the national average for a 30-year fixed rate VA home loan this week was 7.22%. On a $400,000 home, that could lower the monthly payment by about $200.
"You've seen this benefit go from about 2% of the mortgage market 15 years ago, to about 12% of the market today," said Chris Birk with Veterans United Home Loans.
Birk says buyers can encounter some sellers who won't accept VA home loans. But he says they close at about the same rate, pointing to an ICE Mortgage Technology report that showed over the same three months in 2021, 75% of VA loans closed, compared to 76.9 % of conventional loans.
Birk also says sellers shouldn't be concerned about the government's home safety requirements, saying repairs are negotiable just like in a conventional home purchase.
"That doesn't mean that you can't buy a fixer upper with a VA loan. It doesn't mean that a house has to be in perfect condition," said Birk.
For Swalander, a VA home loan has been life-changing.
"I'm so thankful and so grateful that I got to do this, you know, at this time, and I'm really excited about my future," he said.
Veterans can learn more about VA home loans through the US Department of Veterans Affairs and Veterans United Home Loans.