‘So Many Myths’ About VA-Backed Mortgages
The Dept. of Veterans Affairs says veterans are the most highly competitive buyers in today’s market: They have an average 722 credit score, 40% DTI and $54K to spend.
NEW YORK – The Department of Veterans Affairs (VA) says it’s working to dispel many real estate agents’ misconceptions – that VA loans take longer to close than conventional ones and that VA purchasers lack financial stability because they’re getting 100% financing.
“A veteran buyer is one of the most highly competitive buyers in the marketplace now,” says John Bell III, executive director, Home-Loan Guaranty Program at the U.S. Department of Veterans Affairs. “They have a 722 average credit score, they have less than a 40% debt ratio and they have $54,000 in reserves.”
VA loans can be offered to active-duty service members and veterans who were honorably discharged, but National Guard and Reserve members, certain military spouses and other uniformed service personnel may also be eligible. Borrowers must meet a lender’s minimum underwriting standards to qualify.
Catherine Giordano, an agent with Berkshire Hathaway HomeServices Chicago, says she has encountered sellers who were hesitant to accept offers from buyers using VA mortgages.
“I have had to fight with a lot of agents because they don’t know that VA loans are just as good as conventional ones,” she says. Two years ago, she worked with a VA buyer who made a full-price offer on a home, yet encountered resistance from the seller who thought the closing would be delayed, and that he would have to pay for inspections and other fees.
After clearing up the misconceptions, the deal closed in less than 30 days.
Source: Wall Street Journal (06/29/23) Friedman, Robyn
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