It comes as no surprise that the rise in COVID-19 cases rocked the housing market in more ways than one. Military homebuyers are facing new challenges in their search for a dream home. Yet, VA loan usage has surged in 2020 and is likely to hit record highs dating back to when the program started in 1944.
The VA loan has always been an attractive and beneficial mortgage option for many military borrowers, but there are a few reasons it is increasing in popularity during the pandemic.
- They are safeguarded against foreclosures. One of the most important VA loan benefits during COVID-19 is the protection against foreclosures. Many mortgage lenders have foreclosure avoidance teams to ensure that veterans can keep their homes in times of financial instability, making this an attractive option for homebuyers financially impacted by COVID-19.
- Mortgage rates hitting historic lows. Veterans and active-duty homebuyers are taking advantage of lower monthly mortgage payments and the VA loan’s competitive interest rates.
- No down payment means more cash. Unlike many other mortgage options, one of the most significant benefits of the VA loan is the ability to purchase a home with $0 down. With financial hardships hitting many families, taking advantage of the no down payment provides more money in the bank and peace-of-mind for military members.
- No PMI or monthly mortgage insurance. Unlike other mortgage options, VA loans don’t require either of these recurring, monthly charges. Military homebuyers can expect to save a couple of hundred dollars a month without these fees.
- Limits on closing costs. This is to ensure that homeownership is affordable. While other mortgage options tack on fees during the closing, the VA adds another incentive by limiting what the buyer is required to pay.
Regardless of the circumstances, the VA loan is a powerful mortgage option that military homebuyers choose time and time again. Military homebuyers won’t be stopped by these uncertain times, and the VA loan is their key to purchasing the home of their dreams.
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