TYLER, Texas — The housing market continues to move at a rapid pace, but there’s a group of potential buyers who are often left behind: veterans.
“In this market right now, it is a little bit more challenging,” G.P. Theriot said.
Moving into a brand-new home is an act of freedom and independence for most buyers. Those are things America’s men and women in uniform fight for. But many veterans in the market find that “for sale” sign actually means “for someone else.”
Dozens of members of Congress believe a VA home loan had gone from being an advantage to a hindrance in many cases. Approximately 60 members from both parties, including Rep. Jake Ellzey, who represents part of East Texas, sent a letter to the Secretary of Veterans Affairs asking the department to improve the loan process. They said veterans and servicemembers are being passed over so often, 11 percent of VA borrowers switch to something else in order to purchase a home, compared to just one percent of conventional borrowers.
“They've been over there, and they've been defending this great country,” Theriot said. “So let's help them use their VA home loan.”
Unlike a conventional loan, for which the buyer makes a down payment, VA loans are for the home’s full purchase price and are fully-backed by the government. “They’ve earned this benefit, so take advantage of 100% financing for the VA loan,” Theriot stated.
Theriot earned that benefit by serving in the 101st Airborne for four years before becoming a mortgage advisor with Theriot Mortgage Group in the Dallas area. He said many sellers’ agents discriminate against VA loans, believing that without cash at stake, a veteran or servicemember might not be as committed to a deal as a buyer putting cash down.
“Most of these veterans, they have money saved up for a down payment,” he explained. “So, what's so powerful about this is, you know, here lately, people have been going over asking price, let's say the listing price. Well, we have 100% to play with. So, if it doesn't appraise, a lot of these veterans, they can make up that gap.”
With homes moving so quickly, lots of buyers will choose a cash offer or a conventional loan that waives contingencies over a VA loan. Theriot said after hearing that, many veterans will not consider using a VA loan.
“And there's nothing more that gets me fired up because the loan officers or even the veteran, because they don't know because they're hearing such bad negativity about the VA loan that they think is not even an option, and that’s not the case.”
Theriot added that, since veterans do not have to make a down payment, if they invest that amount of money wisely their VA loan can cost less than a traditional loan even if they have to pay interest on 100 percent of the loan, rather than 80 percent like with a conventional loan.