VA Home Loans Not as Helpful As They Seem
After a day of remembering the sacrifices that veterans have made for our country throughout the years, many are questioning whether or not our country is doing enough for them in return.
At a glance, the Department of Veterans Affairs has been successful in providing veterans with VA home loans to help them find adequate housing. According to Market Watch, the VA has made 2.1 million VA home loans available for the estimated 22 million veterans in the U.S. These loans have helped almost 80% of veterans own their homes, as opposed to the 63% of non-veterans who own a house.
The 1944 GI Bill brought about the VA home loan program to offer veterans either zero or low down payment home loans (depending on the amount of the mortgage) with low interest rates. They also are more flexible in terms of debt and poor credit scores, and they do not require borrowers to get private mortgage insurance.
Despite the impressive statistics, some argue that VA home loans are not common knowledge among veterans and that many lenders don’t even recommend them to clients who are active duty service members or veterans. The reason? VA loans are not necessarily beneficial to the bank, causing lenders to push other types of products on veterans instead of VA loans.
“It takes lenders more work and time to process VA loans than conventional loans, which cuts into profits,” said U.S. Marine Corps veteran Dennis Wyant, who now serves as vice president of sales at loanDepot.com, according to Market Watch.
They may not be ideal for banks, but many veterans and active duty service members haven’t even heard of VA home loans, preventing them from inquiring about the program at all. The results of a recent survey of 2,000 Iraq and Afghanistan Veterans of America (IAVA) revealed that only 36% of members had applied for VA home loans.
Other barriers that stand in the way of veterans securing VA home loans include high loan origination fees, delayed inspections and appraisals, and stipulations that bar married veterans from using their full entitlement towards loans.