Why Do Millennials Love VA Loans?
As discussed beforehand, millennials are currently dominating the home buyer’s market, and here’s how! When many millennials finish their service in the military, they start to enter the workforce. Since many millennials are getting a head start on their career, it’s no wonder why most would want to start settling down and buy their first home. Anyone, from millennial to a different generation, who’s still active or are retired in the military are qualified for a special loan program called the VA loan, a home loan that is guaranteed by the U.S. Veterans Administration. And with these benefits, it’s no wonder why today’s millennials choose the VA program, especially the one offered by Mortgages for Champions:
- No down payment required – Most loans that are on the market require a minimum of 3.5% down payment or more, depending on the borrower’s situation of credit and income. VA loans are one of the few programs that are being offered that requires no down payment to start with. In 2016, the average VA loan amount was for $253,000. If the veteran applied for an FHA loan instead of a VA loan, they would be required to put down a minimum of $8,855, the 3.5% required, as a down payment if they want an FHA loan.
- No mortgage insurance – If a borrower puts down less than 20% of the purchase price, the borrower will be responsible for another monthly fee called mortgage insurance. Depending on the loan and the amount, mortgage insurance can add an additional $100 and up to your monthly payment. However, any active or retired military personnel and their immediate family members are not required to pay mortgage insurance if their down payment is less than 20% or they didn’t put one down to start with.
- Credit guidelines that are more flexible – The U.S. Veterans Administration has one goal in general: to help any military personnel achieve home ownership. Because of this, their underwriting guidelines are more far more flexible and forgiving to those with a not-so-perfect credit score. The average credit score of a VA borrower was 50 points lower than the average credit score of someone who applied for a conventional loan. And despite the flexibility in credit scores, VA loans have the lowest foreclosure rate on the market for most of the past couple of years. The VA’s committed to help veterans obtain and keep their homes.
- No bank closing costs – There are multiple types of closing costs that are involved when someone obtains and closes on a mortgage. With Mortgages for Champions, we will drop the application fees, loan processing fees, mortgage underwriting fees, mortgage commitment fees, and associated commitment points. Any closing fees one are responsible for, mainly 3rd party fees, can be rolled into their loan to help.
While the workforce continues to grow and targeting the age range of 25 to 34 years old, it’s no wonder why millennials in general want to settle down sooner. With the help of VA loans, millennials who go from active duty to the workforce can start settling down and create a stable living situation for them and their families with little to no money to start the process. Active and retired personnel can now worry less about down payments and closing costs that are needed up front and worry more about more important issues like where do they want to live? For more information on the VA loan benefits and how it can help out millennials, give us a call at 1-888-763-3500.
Check out our video on VA loans here:
What is a VA Loan?
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Minimum credit scores and maximum loan limits apply. Not all applicants qualify. RHF is an Equal Housing Lender. Certain products are not available in all states. Credit and collateral are subject to approval. This is not a commitment to lend. Program, rates, terms and conditions apply. Lender application, commitment, processing and underwriting fees waived. Borrower pays 3rd party fees including, but not limited to, title, appraisal and any points. Licensed Mortgage Banker: NMLS# 34973