A Guest Blog by Matt Polsky. Matt Polsky is the Senior Editor of Smart Military Money, a personal finance blog specifically for veterans and service members.
VA Home Loans for Veterans and Service Members
Veteran’s Day rooted from Woodrow Wilson declaring Armistice Day on November 11th, 1919, following the infamous Treaty of Versailles. Wilson said, “To us in America, the reflections of Armistice Day will be filled with solemn pride in the heroism of those who died in the country’s service.” It wasn’t until 1921 that Armistice Day was changed to Veteran’s Day, honoring not only the fallen, but all who have served.
This was further enforced in 1944, when the government first made available the VA home loan program. The program was designed to help returning troops who fought valiantly during World War II to find the home of their dreams and continues to this day. The program is a self-sustaining program and needs no excess money from the government to continue providing amazing benefits to our veterans and active service members. While this is a great program, potential homeowners still must ask themselves if this program is right for them.
While government backed VA home loans are a great option for almost every veteran, active service members must consider what buying a home will mean to their financial situation. An active duty member can experience frequent moves and deployments that have the possibility of leaving their home on the market or in disrepair for quite some time. This financial burden is a difficult one to carry, which can cause late payments, delinquencies, and eventually foreclosure, which brings on a poor credit score.
Deployed military members with a home or outstanding debt should remember to apply for protection under the Servicemember’s Civil Relief Act, which offers an umbrella of financial protection while you are overseas.
For service members and veterans in a more permanent situation, VA home loans offer many benefits. For instance qualified borrowers are not required to put any money down, which is a large hurdle for most conventional programs. While many think this could bring on more financial problems, the VA home loan program has some of the lowest foreclosure rates in the nation. Other benefits include:
- No private mortgage insurance
- Competitive interest rates
- High loan limits
- No prepayment penalty
To be eligible for the program, a person should have served on active duty during wartime for 90 days or peacetime for 181 days, served in the National Guard or Reserves for at least six years, or be the spouse of service member who died in the line of duty.
When searching for your Colorado Springs home be sure to contact an expert on the area such as Rick Van Wieren. Rick knows the ins and outs of the area and has your best interest in mind. As a service member or veteran, you have access to one of the greatest lending programs on the market today; however, it is important to be financially responsible and make sure you can handle the joy and responsibility of homeownership.
Matt Polsky is the Senior Editor of Smart Military Money, a personal finance blog specifically for veterans and service members.