Vets: Ignore one-and-done home loan myth
Home loans financed by the Veterans Administration are rising spectacularly.
In the Coeur d’Alene metro area, VA loans have jumped 87 percent in the five-year period from 2013 to the present.
Even in a county experiencing dynamic growth, that’s a gigantic number. What’s happened to give VA loans such an explosive boost?
Perhaps our handy time machine might explain things.
Let’s speed back 30 years to 1988, and there I am — working as sports editor of the Decatur Herald & Review in central Illinois.
It was a great job, and I expected to be in that position for a fairly long time. So I decided it was prudent to buy a house.
I found a terrific opportunity: a lakeshore home with a dock, terrific views, a Jacuzzi on the outdoor deck and many other lovely extras.
The only downside was that I had been working for peanuts in previous gigs, so I didn’t have a ton of money in the bank.
Qualifying was easy: I made a decent salary and hosted a radio show for extra cash.
But the healthy down payment was going to be difficult.
The answer to my problem was the Veterans Administration.
With an honorable discharge from the U.S. Air Force in my pocket, I was able to sign off on a VA home loan with all its perks — no down payment, no PMI (private mortgage insurance), etc.
But a lady with the VA warned me: “Remember, you can only use this benefit once. If you buy this house, you won’t be able to get another VA home loan in your lifetime.”
Nevertheless, I bought the house.
NOW, WE use the time machine again and zoom forward to the present.
Potential buyers in roughly the same situation where I found myself in 1988 are grabbing VA loans like low-hanging fruit.
The incredible jump in VA loans since the recession of 2008-2012 seems astonishing, especially since many North Idaho buyers are relocating from elsewhere — California, in particular.
I looked at those numbers and thought: Didn’t a lot of these buyers use their VA loan benefit earlier in life?
If so, they couldn’t do it again.
Right?
Nope.
That turns out to be wrong, and so are many other assumptions about veterans’ benefits.
“I think there are a couple major factors helping to drive the increase in VA lending,” said Chris Birk, director of education at Veterans United Home Loans, the nation’s largest VA lender.
“One is greater awareness of the benefit and its advantages in the market. The average VA loan amount in Idaho in FY18 was about $240,000.
“For a typical conventional loan of that size, veterans would need a healthy down payment, and still be on the hook for paying additional monthly costs for private mortgage insurance (PMI).”
FINE, BUT what about the one-time restriction?
Surely all these folks capitalizing on VA loans now haven’t been using conventional mortgages all their lives.
“One of the biggest myths about this program is that it’s a one-shot deal,” Birk said. “This is a job benefit that veterans have earned for life.
“You can use it over and again, and it’s even possible to have multiple VA loans at the same time.”
Whoa!
There are some restrictions involved, but Birk said that basically, a veteran might have bought a home in California years ago with VA financing, yet now cash in on that equity and enjoy another VA loan in North Idaho.
In Kootenai County, the current loan limit is $453,100.
So we have our answer on why VA loans have been increasing.
“I would say mostly it’s down to increased awareness of what’s available to you as a veteran,” Birk said. “Vets are receiving better education.
“A lot of benefits have gone unused in the past because vets didn’t know they were entitled to them, and that really shouldn’t happen.”
No, it shouldn’t.
So if you’re a veteran or part of a military family, please …
Learn from this, the way I failed to do.
Ask about ALL your benefits.
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Steve Cameron is a columnist for The Press.
A Brand New Day appears from Wednesday through Saturday each week.
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