Home mortgages guaranteed through the Department of Veterans Affairs, better known as VA mortgages, are one of the best ways for qualified veterans and military families to finance the purchase of a home. In fact, more than 630,000 veterans took advantage of the VA loan program in 2015, and another 415,000 have already used their loan benefit as of May of this year.1 With a program this popular, it’s hard to understand why some eligible veterans might not apply for a VA mortgage. Let’s look at some VA loan myths that might keep veterans from using their loan benefits:

VA loans are more expensive: In fact, nothing could be further from the truth. VA mortgages were designed to help veterans purchase homes. The fact that VA loans are guaranteed helps keep their interest rates low. According to the September 2016 Ellie Mae Origination Insight Report2, the average 30-year rate for a VA loan was 3.52 percent in September, compared to 3.73 percent for FHA loans and 3.81 percent for conventional loans.

VA loans are slow: Again, this simply isn’t accurate. VA loans that closed in September took an average of 51 days, compare to 49 days for FHA loans and 48 days for conventional loans, according to Ellie Mae. In fact, Embrace Home Loans is known to close VA loans in under 30 days

VA loans are risky: This myth stems from the fact that VA loans don’t require a down payment. In fact, VA loans have the lowest foreclosure rate of any mortgage, according to the Mortgage Bankers Association.3 As of the first quarter of 2016, only 1.24 percent of VA loans were in foreclosure. In contrast, 2.41 percent of FHA loans and 1.63 percent of conventional loans were in foreclosure.

VA loans require perfect credit: Again, VA loans are intended to help veterans, so they have much more flexible credit guidelines. Ellie Mae says the average FICO score for a VA loan to purchase a home in September of this year was 708, and many lenders will accept scores as low as 620.

Separate fact from fiction

At Embrace Home Loans, we’re experts in VA mortgage lending. We can help you understand your VA mortgage benefit, and we’ll work with you to get the financing you need for your new home. Call us today at 407-733-6425 and get the facts about VA mortgage loans.

1 http://www.benefits.va.gov/HOMELOANS/documents/docs/2016_newsletter.pdf

2 http://www.elliemae.com/origination-insight-reports/Ellie_Mae_OIR_SEPTEMBER2016.pdf

3 https://www.mba.org/2016-press-releases/may/foreclosures-continue-to-decrease-delinquencies-flat