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VA Lender Says Never a Better Time to Buy

VA Home Loans

“Low prices, low rates and good inventory make this a great time to buy,” says Tim Lewis of iFreedom Direct®, a national VA home loan lender. “While nothing is guaranteed, it looks like the housing market has bottomed out and prices are beginning to go up again, making it an ideal time for first-time buyers to get into the market.”

VA loans can provide first-time home buyers with unique combination of features they can’t get with FHA or Conventional programs, Lewis says, such as:

  • Zero Down Payment up to $417,000
  • No Monthly Mortgage Insurance Premiums
  • Easier Qualifying Standards

Zero Down Payment – VA loans give first-time home buyers an advantage when it comes to down payments, he adds.  One of the biggest obstacles for many first-time home buyers is scrounging up enough cash to put down.  Home-buying virgins are often young and haven’t had enough time to build sizable savings.  Also, they don’t have proceeds from the sale of a home like many repeat buyers do.  With a VA home loan, eligible borrowers can buy a home with as little as zero money down.  Other programs will require between 3.5 and 20 percent or more cash up front.  For a newbie home buyer, a VA-guaranteed mortgage can save thousands out of the gate.

No Monthly Mortgage Insurance – VA home loans never require monthly mortgage insurance premiums, Lewis explains.  Conventional buyers who don’t have 20 percent to put down, will likely have to pay monthly mortgage insurance until their loan to values reach 80%. Most FHA borrowers pay monthly mortgage insurance regardless of how much they put down. Because the government backs a portion of every VA loan, the monthly insurance premium isn’t necessary.  If fact, it’s forbidden.  No private mortgage insurance payments can easily save borrowers $100 each month.

Easier Qualifying Standards – Qualifying for VA mortgages is typically easier than conventional qualifying.  Establishing credit can take time.  According to a recent report from Ellie Mae, Inc., mortgage qualifying standards have gotten a bit easier, but they are still tougher than VA loans.  Check out the qualifying averages of surveyed Conventional and FHA loans closed in December  2013:

  • 727 Credit Score
  • Down Payment 20% and 5%(Conv. and FHA respectively)
  • LTV of 74% and 85% for Refinance Loans (Conv. And FHA respectively))
  • DTI Ratio of 39% ( back-end average)
  • 46 Days to Process Purchase Loans, 40 Days for Refinance Loans

Now look at these qualifying standards for VA loans:

  • Zero Down Payment up to $417,000
  • 100% LTV for Purchases and Refinances
  • DTI Ratio of 41% (many qualify with higher DTIs if they have enough residual income)
  • Most loans close within 30 Days with iFreedom Direct®

Buying that first home is one of life’s milestones.  The money-saving features of VA loans may help some get there sooner.  For additional facts about the advantages of VA loans for first-time homebuyers contact an experienced veterans’ mortgage professional. “We’d be happy to talk with you to walk you through the process,” Lewis adds.

 

Source: Ellie Mae Mortgage Originators Report December 2013

 

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