Dear Realtor…VA is the best loan you can get.

A “Veteran” Move

There’s a persistent myth in the real estate community that needs to be buried once and for all. For many real estate agents, a Veterans Affairs (VA) mortgage is considered a poor-quality offer in comparison to a Fannie/Freddie (conventional) offer. These mortgages are often times considered “weak,” and the thought is that VA buyers are considerably less qualified than conventional buyers.

That thinking is dangerously narrow-minded. In fact, the old thinking that the VA buyer is not a strong one, and that you shouldn’t seriously consider a VA offer over conventional and FHA ones, is practically obsolete. If you are a real estate agent representing the home seller – or if you’re the actual home seller – I strongly encourage you to review and consider any offer that comes to you through the VA.

Oh, now you’d like to know WHY. Okay! Here goes:

• They’ve earned it. The biggest concern that many have about the VA mortgage comes with the terms – 0% down. This gives the illusion that the veteran has no “skin in the game,” and that the loan will perform worse. It’s true that the terms are different for conventional loans (with up to 20% down), but that does not necessarily mean that the person getting the VA loan is less qualified. In fact, it’s quite the opposite. The bottom line is that the veteran has earned those terms. They’ve earned the right for 100% financing on their home. They’ve gone through a lot for our country – physically, emotionally, mentally. They’ve left their homes and family to defend our freedoms. They’re the embodiment of all that’s good and forthright about this country. I think that means they’ve earned this financial boost. Don’t you?

• Their credit score – Here’s something you might not be aware of – the average median credit score for a VA borrower is 738. If that sounds good, that’s because it is. That credit score is significantly higher than the average American’s credit score. So, while it’s definitely true that the VA allows veterans with lower credit scores to get a loan, that doesn’t change the fact that the average credit score is higher than most conventional buyers. It’s also definitely higher than the average FHA buyer. That means that when you accept an offer with a VA loan, you’ll have an excellent chance of engaging with a highly-qualified buyer. That’s a win-win for everyone.

• Their income – At $73,000, the average VA household income is higher than the average median household income for buyers across the United States. Some veterans are two household income earners, and many are receiving VA benefits for their service in addition to their current employment. That generally adds up to a good, stable income situation. Although the VA is lenient on their qualifying, there’s still a good chance you will have an excellent income earner putting in a good offer on the house.

• The performance – The numbers don’t lie: less than 2% of all VA loans go into default for a lack of payment. That performance is significantly better than FHA results and even better than a conventional loan with 20% down. What does this add up to? Well, it makes the VA the best-performing loan on the entire market.

  Another note – even if something unfortunate happens, and the VA loan goes into default and foreclosure, the lender has 100% guarantee coverage by the VA. That’s not the case with Fannie Mae, Freddie Mac, or FHA. Those are considered great, high-performing loans that lenders love; if they have the opportunity, they will always do a VA loan.

You’ve got a great opportunity when it comes to VA loans. Veterans are better income earners, have higher credit scores, and have better-performing loans than the average buyer. Additionally – and most important – these veterans have earned the right for the boost that comes along with this tremendous loan problem. Let’s not deny them of something they’ve so richly earned.