The foreclosure rate of homes is at an all-time high today with homeowners losing their homes every day. The combination of a shaky economy, high interest rates and the high cost of homes are all making it very difficult for couples or individuals to purchase a home. If they are able to purchase a home, these vary same factors listed make it difficult to keep their home.
There is no specific income or demographic group that is affected by foreclosures more than another is. Even veterans that have purchases their homes with the help of the Veteran’s Administration (VA) are being affected by the economy and the high rate of foreclosures. VA foreclosure homes are listed on the market every day.
When a veteran purchases a home with a VA loan, the lender offers a lower rate of interest because the VA is guaranteeing the loan. They guarantee that if the veteran cannot make the payments and the loan gets in default, they will pay off the loan. With the guarantee from the VA, foreclosure homes are not a large concern with banks and lending institutions as they would be with an independent borrower. When a VA loan goes into default, forcing the VA to pay off the loan, they take over ownership of the home and attempt to sell it.
VA foreclosure homes that are paid off by the Veteran’s Administration are put up for sale to other interested buyers. Through the help of the VA Vendee Financing program, many non-veterans can purchase VA foreclosure homes. Not only can they purchase these homes, but also they get help from the VA Vendee Financing program. This program helps non-veterans to purchase these VA foreclosure homes at a lower interest rate than they would find at a bank.
The requirements to purchase these VA foreclosure homes are not as strict as if they were getting a loan from a bank. The VA is the one that sets the interest rate, usually less than banking rates. Buyers are not required to make as high of a down payment as banks would require, with some down payments being as low as 5% down. In addition, they do not require some of the other fees that banks do such as flood certification fee, appraisal fee, required tax service or mortgage insurance.
The closing fees on VA foreclosure homes are very low, which makes it more possible for many investors to purchase these homes. There is a VA funding fee, which is usually 2.25%. The only verification the borrower has to provide is the last two years’ income and employment. They also have to show they can provide the closing fees. The VA foreclosure homes are sold on an as is basis, so any needed repairs have to be paid by the new owner.