The VA guaranteed nearly 630,000 mortgage loans in 2013 and the average loan was around $225,000. The VA’s total loan volume has soared by 372 percent since 2007, according to Chris Birk, the executive editor at Veterans United Home Loans.
The New York Times reports that one reason for the increase is historically low interest rates, which have driven a high demand for refinancing loans. The paper notes that about half of last year’s VA loans were for the purpose of refinancing. However, that business did drop off a bit toward the end of last year as interest rates increased.
An overall tight lending environment is also making VA loans more attractive to service members.
“It’s become so much more difficult for military personnel and veterans to qualify for conventional financing,” Birk says. “This is the only path to homeownership for many.”
VA loans do not require a downpayment for first-time home buyers, and about 90 percent of all VA-guaranteed loans for home purchases are made without any money down. The loans also do not require private mortgage insurance.
Source: “A Big Year for V.A. Loans,” The New York Times (Jan. 9, 2014)
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