29 Oct VA Loans Are on the Rise
With the end of the fiscal year on September 30th, VA loans–those that are backed by the Department of Veteran Affairs–rose more than 50%. VA loans have risen in popularity with current and former military members because of tighter credit standards on conventional financing and attractive low interest rates. Additionally, borrowers who already have a VA-backed mortgage are eligible for interest rate reductions.
According to the Department of Veteran Affairs, they guaranteed 540,000 loans during the 2012 fiscal year, the most since 1994. According to Mike Frueh, the director of loan guarantee service, volume is nearly 300% as compared to five years ago. VA loans are particularly attractive because they offer the ability to purchase with no down payment, an option that has mostly disappeared since the subprime mortgage market fell apart.
For those VA borrowers looking to refinance, the department’s streamlined refinance program doesn’t require these borrowers to “re-prove” that they qualify. Adds Nathan Long, the chief executive of Veterans United Home Loans, “It’s a great benefit not to have to go through all the hoops that you would otherwise have to.”