VA home loans are among the most important benefits veterans can easily access, but there are a few misconceptions that might prevent some veterans from using them. A fact of life for Veterans is that the benefits are usually not well publicized; they should generally be actively sought out and sought out. With the number of setbacks veterans may face during a transition, having accurate VA loan information is crucial. Here are four common myths about VA loans that are incorrect.
1. VA loans have high rating rates.
Reality: VA loans offer a consistently lower 30-year rating rate than conventional and FHA loans. The last week of June 2021 showed a 30-year note rate of 3.20% for VA loans, compared to 3.21% for FHA loans and 3.18% for conventional loans.
A note rate is an interest rate listed on a promissory note for a mortgage. This is not the same as the Annual Percentage Rate (APR), which reflects the interest rate after costs beyond the price of the house are factored in.
So consistently low rating rates mean constant savings for VA loan borrowers. Without a down payment on VA loans, a low interest rate means that homes are even more affordable for veterans.
2. VA loans don’t close very often.
Reality: According to the VA, VA loans more frequently close by a large margin. 73% of VA loans closed versus 67.9% of conventional loans and 61.5% of FHA loans. This is in part influenced by the lower credit score requirements for VA loans. Lenders tend to seek a minimum score of 620 from VA buyers, which is about 100 points lower than the requirement for most other loans.
3. It takes a long time to close a VA loan.
Reality: If you’re worried that VA guaranteed loans are taking too long to complete, fear not. VA and FHA loans take an average of 40 days to close, while conventional loans take 39 days to close. VA loans are not progressing in this regard, but they are certainly not worse than other types of loans.
4. VA loans do not increase.
Reality: You may have heard that VA loans don’t increase, but this information is clearly wrong. If you are using popularity as a measure of value, VA loans should be high on your radar. Over the past 70 years, VA has backed 20 million loans and the numbers keep growing.
With this type of massive growth, the VA loan is a serious mortgage candidate and is definitely worth a veteran’s time to research.
Our VA Loan Finder can match up to five quote from different lenders. Check it out now!
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