For Real Estate Agents: Want to Thank Veterans? Help them become Homeowners
Veterans Day is a time to pay tribute to our service members. It’s a way to say thanks for keeping us safe. Thanks for traveling to parts unknown and taking up arms to defend our freedoms. It’s a time to show respect and gratitude.
But is saying “thanks” and shaking a veteran’s hand enough? No, it isn’t. To demonstrate your appreciation for all that service men and women have done, help them buy a place to call home. Use your skills to fulfill their most basic need, housing. It’s not about one day of honor, it’s about using your business to help veterans every day.
With a VA Loan veterans, and eligible surviving spouses, can become homeowners. This VA benefit provides a federally guaranteed mortgage with no money down, no private mortgage insurance and lenient credit requirements. In other words, the government assumes the risk for these mortgages because these men and women assumed so much risk for us.
As a real estate professional, one of the first questions you should ask potential clients is whether or not they ever served in the armed forces. There are so many benefits that go along with answering yes. Veterans, or their surviving spouses, can use a VA Loan to:
- Purchase an owner-occupied house, condo or manufactured home. It can also be used to build or rehab a home.
- Refinance an existing home mortgage to get a lower interest rate.
- Cash-out refinance to pay off debt, fund college or make home improvements.
There is essentially no reason why a veteran, or their surviving spouse, shouldn’t use a VA Loan.
Maybe you’re thinking that the home values in your area are so high, a VA Loan is irrelevant. Think again. The VA doesn’t have a loan limit. So if you have a $1 million buyer who also happens to be a veteran, she could purchase that home with a VA Loan.
Of course, the rules change a bit. The buyer would have to put money down. Here’s how it works:
If buying a $1 million home in a county with a $625,000 loan limit, per the Federal Housing Finance Authority, the VA will guarantee 25% of that 625,000. The buyer would need to bring 25% of the difference between the purchase price and the loan limit to the table. Here's how that looks:
- $1,000,000 – $726,525 = $273,475.
- The buyer puts down 25% of the $273,475 or $68,368.75
- The buyer would then get a loan for 931,631.25 with no mortgage insurance.
Of course, the buyer would have to have the income and assets to qualify for that loan amount, but interest rates and allowable seller concessions are much more favorable with VA Loans than jumbo loan programs.
Many veterans are unsure of their status and doubt they qualify for these benefits. Help them know for sure. Instruct your veteran clients to check their eligibility here. Their lender, Guaranteed Rate, will need their Certificate of Eligibility. There are nearly 19 million veterans in the country. Surely, you can help one.