VA Home Loan Numbers on the Rise
A recent New York Times article titled, “VA Loans Surge in Fiscal Year” points to greater interest in VA loans, which “surged by 50 percent in the fiscal year ended Sept. 30, as tighter credit standards on conventional financing made these programs all the more attractive to current and former military members” according to the article.
New York Times states show the Department of Veterans Affairs has guaranteed more than half a million VA loans in the 2012 fiscal year. That’s “the most since 1994, ” the article states, “Compared with five years ago, volume is up some 300 percent” according to the October 11, 2012 NY Times report.
Why are VA home loans getting all the attention in a housing market still troubled in many areas in spite of news of a recovery? Low interest rates are one reason, refinancing is another. According to the article, more than half of all VA loans cited in the statistics were for refinancing.
One aspect of the article may have some borrowers thinking a VA streamline refinancing loan is always a non-credit qualifying transaction. “Borrowers who already have a VA-backed mortgage can get an interest-rate reduction relatively easily. The department’s streamlined refinance program doesn’t require these borrowers to “re-prove” that they qualify”. But it’s important to point out that in the case of cash-out refinances and certain VA Streamline loans that wind up raising the monthly mortgage payment may require a credit check or additional underwriting by the lender.
The lender is also free to conduct a new credit check even though VA streamline refinance requirements don’t expressly require it.
Refinance loans are still a very good option for many borrowers looking to get into lower interest rates on their VA home loans; careful research into the rates and terms, financial planning and budgeting can make a new VA home loan or refinance a smart move for the prepared borrower.
Do you have questions about VA home loans? Ask us in the comments section.