Spend a few minutes using the Google Trends tool, and you can learn a lot about internet search trends. Here’s a trend that relates to our customer base. It seems that an increasing number of people are wondering if VA loans are still available, during the 2020 coronavirus (COVID-19) crisis.
The short answer is yes. VA-backed mortgage loans are still available in California and nationwide, despite the ongoing coronavirus situation.
VA Loan Program Alive and Well
The VA loan program is a popular financing option among home buyers in California. This program is geared toward military members and veterans. And we have quite a few of those folks in California. We have the highest number of active duty and reserve military members of any state in the country.
So it’s important for people to realize that VA loans are still available, even as the public-health crisis drags on.
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In fact, it’s often easier for borrowers to qualify for a VA loan in California, when compared to a “regular” conventional mortgage. That’s because the federal government (through the Department of Veterans Affairs) partially guarantees VA loans. And the program is still going strong.
According to a May 7 article in The Los Angeles Times:
“Data from the Mortgage Bankers Assn. show a sharp tightening of credit for jumbo home loans, and a smaller pullback for loans insured by the Federal Housing Administration and the U.S. Department of Veteran Affairs…”
Recent data from the Mortgage Bankers Association (MBA) showed that VA loans are holding steady, in terms of overall application volume. On May 6, the MBA reported that the “VA share of total applications remained unchanged from 13.3 percent the week prior.”
The bottom line to all this is that VA-guaranteed mortgage loans are still available in California, even with the partial shutdown resulting from the coronavirus pandemic.
No More Government-Imposed Limits
Borrowers should also know that the Department of Veterans Affairs has eliminated the loan limits for VA-backed mortgages, effective in 2020.
In the past, borrowers who used a VA loan to buy a home with no money down had to stay within a certain loan amount range. Borrowing more than the county-specific limit meant that the home buyer had to put down a portion of the difference.
But that all changed in 2020, with the passage of a new law designed to benefit military members and veterans. Going forward, the VA does not limit home loans. It’s up to the lender to determine how much a person can borrow, based on their income and other factors.
According to George Ratio, senior economist for Realtor.com: “The change in loan limits removes an obstacle for many veterans, and just as importantly, it offers a wider geographical choice on the journey to their next home.”
To recap: VA loans are still available in California, despite the COVID-19 situation, and they’re now more flexible thanks to a recently enacted law.
A More Digital Mortgage Process
Home buyers and mortgage shoppers in California can take comfort from knowing that loans can be originated, underwritten and closed without face-to-face contact. The mortgage industry has been moving toward a digital loan process for the past few years. COVID-19 just sped things up.
At Bridgepoint Funding, for example, we have found a way to handle the entire home loan process digitally. This is true for VA loans, as well as conventional mortgage products. We can help you navigate the mortgage process while protecting your health at the same time.
Record-Low Rates for VA Loans in 2020
Are you planning to use a VA loan to buy a house in California in 2020? Here’s something else you should know. Mortgage rates have been hovering near a historic low for weeks now.
In fact, they set a new record at the end of April when the average rate for a 30-year fixed mortgage loan dropped to an astoundingly low 3.23%. That’s based on the weekly nationwide survey conducted by Freddie Mac.
On May 7, Freddie Mac’s research team wrote:
“Mortgage rates stayed at or near record lows for the fifth straight week and homeowners are taking advantage with refinance activity remaining high. Although purchase demand declined … in mid-April, demand has improved modestly over the last three weeks.”
Have questions about VA loans? Ask us! Bridgepoint Funding specializes in VA loans for California home buyers. We are passionate about the program. Please contact us if you have any questions about using this program to buy a house.