One loan product makes home ownership more affordable for young buyers.
Today’s housing market is extremely difficult to navigate despite the fact that mortgage rates has been at or near historic lows since mid-2020. Cause? Housing stocks were very limited and, as a result, home prices rose sharply nationally.
Now, rising house prices not only mean higher mortgage payments – they also mean more advance payment at close. And for many buyers, this is an obstacle. But there is one loan product that does not require buyers to invest at the close of the deal at all, and it helps younger borrowers get a piece of the real estate deal.
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Young Borrowers Turn to VA Loans
According to a recent analysis by Veterans United, VA credits New home purchases for Gen Z veterans between the ages of 18 and 24 were up 123% year over year. Among millennial buyers, VA loans rose 16%. In fact, loans to Gen Z and Millennial buyers accounted for 52% of all VA purchase mortgages in the first half of 2021.
VA loans have one major advantage over other mortgages – they don’t require any money to close. Thus, they are a good option for borrowers who can afford the monthly mortgage payment but may not have a lot of savings to part with.
As the name suggests, VA loans are not available to everyone. They are intended for US military veterinarians and their surviving spouses, as well as active members of the US military.
There are also certain requirements that VA borrowers must meet. First, VA loans must be used to purchase a home that the borrower will live in – they cannot be used for investment property that is rented out to other people. In addition, while there is no official minimum credit rating associated with VA loans, individual lenders can set their own minimums. Borrowers are generally advised to use a decent loan – ideally with a low to medium grade of 600 or higher.
Otherwise VA loans tend to offer competitive interest ratesand they do not charge any recurring monthly fees (unlike FHA loans, for example, which do come with current mortgage insurance premiums).
However, VA loans are charged to borrowers funding fee, the amount of which depends on how much of the initial payment the borrower can make. However, disabled veterans are often exempt from this fee.
If you are eligible for a VA loan and are looking to buy a home, there are a few stores that you should look into. VA Lenders and see what offers they come back to you. Although homes are more expensive than usual today, you may find that you can ditch them if you get a low enough interest rate on your own. mortgage and you don’t need to empty your bank account to make an advance payment. And this gives you more financial flexibility to deal with various home ownership costs you may encounter this when you sign this loan and make a purchase.