A loan product makes home ownership more accessible for younger buyers.

Today's housing market is extremely difficult to navigate despite the fact that mortgage rates have been at or near historic lows since mid-2020. The reason? Housing stock has been very limited and as a result home prices have skyrocketed at the national level.

Rising property prices not only mean higher mortgage payments, but also a higher down payment on completion. And for many buyers this is a deal breaker. But there is a loan product that buyers don't have to put aside at all to close, and it helps younger borrowers get some of the real estate action.

Start your journey to financial success with a bang

Get free access to the select products we use to meet our money goals. These fully vetted tips could be the solution to increasing your credit score, investing more profitably, building an emergency fund, and much more.

By submitting your email address, you consent to us sending you money tips along with products and services that we think may interest you. You can unsubscribe at any time. Please read our privacy policy and terms and conditions.

Younger borrowers are turning to VA loans

According to a recent analysis by Veterans United, VA loans for new home purchases among Gen Z veterans ages 18-24 increased 123% year over year. For Millennials, VA loans rose 16%. In fact, lending to Gen Z buyers and millennials accounted for 52% of all VA purchase mortgages in the first half of 2021.

VA loans offer one major advantage over other mortgages – they do not require any money to be taken out. As such, they are a great option for borrowers who can afford a monthly mortgage payment but may not have a lot of money to save.

As the name suggests, VA loans are not available to everyone. They are reserved for U.S. military veterinarians and their surviving spouses, as well as active members of the U.S. military.

There are also certain requirements that VA borrowers must meet. First, VA loans must be used to buy a home that a borrower will live in – they cannot be used on an investment property that is rented to someone else. While there is no official minimum credit rating for VA loans, individual lenders can set their own minimum amounts. Borrowers are generally advised to start with a decent credit score – ideally with a score in the low to mid 600 range or higher.

Otherwise, VA loans usually offer competitive interest rates and no ongoing monthly fees (unlike FHA loans, for example, which come with ongoing mortgage insurance premiums).

However, VA loans charge borrowers a financing fee, the amount of which depends on how much a down payment a borrower can afford. However, veterans with disabilities are often exempt from this fee.

If you qualify for a VA loan and want to buy a home, it pays to search multiple VA lenders and see what offers they come back with. While homes are more expensive than normal today, if you have a low enough interest rate on your mortgage and you don't have to empty your bank account to pay a down payment, you may find that you can swing one thing. And that gives you more financial flexibility to handle the various home ownership costs you may incur once you sign the loan and your purchase is complete.

source https://seapointrealtors.com/2021/07/24/younger-borrowers-are-buying-up-homes-thanks-to-this-loan-option/

 This free site is ad-supported. Learn more
​