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The Loans That Welcome Vets Home
When rules for qualifying for a conventional mortgage tightened in the wake of the financial crisis, VA loans, guaranteed by the Department of Veterans Affairs, spiked in popularity.
“Since 2007, the volume of VA loans is up 370 percent,” observes Chris Birk, director of education at Veterans United, a loan company in Columbia, Missouri.
Still, lots of veterans and military personnel aren’t aware that this loan program, begun in 1944, could help them buy or refinance, observes Joseph Thiesen, a branch manager for Fairway Independent Mortgage Corp. in Sun Prairie, Wisconsin. “As part of our application interview process, we ask each borrower if they are a veteran to help identify whether they can utilize this program,” Thiesen says.
Indeed, a 2010 survey conducted by the Veterans Administration found that 66 percent of veterans who had bought a home reported using a VA loan, of those who didn’t use these loans, 33 percent didn’t know about the program.
Charles Chedester, a mortgage officer with Midwest Family Lending In Urbandale, Iowa, says: “We have a lot of National Guard and Reservists in this area, and it’s not that they don’t know about VA loans, it’s that they think they don’t qualify.”
Available through some 1,500 banks and lending companies around the country, the government guarantees a portion of the mortgage should the borrower default, and determines the service requirements for who’s eligible to apply for the mortgage.
There’s not one, simple rule on who qualifies, explains Meagan Lutz, VA public affairs specialist, but requirements are outlined at: http://benefits.va.gov/HOMELOANS
Given that the mortgages can be made for 100 percent of the current value of a home and can be used for either a purchase or refinance, Birk says they make refinancing possible for homeowners who’ve seen the price of their home drop.
— Marilyn Kennedy Melia
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