As someone who has been originating mortgage loans in Colorado Springs for almost 20 years, I have a better understanding than most about the unique housing and financial needs of veterans. I have served in the military; most of my personal and professional acquaintances have served; and I have made it a priority to staff my mortgage company, Garvens Mortgage Group, with veterans and military-connected individuals. I have spent years building a company that is peerless when it comes to serving our city’s veterans, and I wanted to share some of what I have learned with you today.
It is, of course, crucial to first discuss what we learned from Empire Title’s Bill McAfee this week, as no one has a better understanding of our local lending and real estate market. Inventory is still incredibly low, especially for this time of year. Most market watchers were anticipating a spike in listings as we moved into spring, but that spike has not materialized. And velocity is still very high; that is, houses aren’t staying on the market long. This should ultimately have the effect of raising house prices, as there seems to be very high demand for what little inventory is out there. We will, however, need to wait until the end of the summer to see what the net effect on prices will be.
The cause of this strange state of the market is two-fold. First, many people—not just millennials—are preferring to rent rather than own, so would-be sellers are deciding instead to keep their old home and rent it out. Second, new housing developments have practically ground to a halt. There is very little new inventory coming onto the market. Therefore, fewer houses are being listed, and those individuals looking to purchase a home have very little to choose from.
Competition for homes is fierce, so those with access to superior lending products will be at an advantage. This is where the VA home loan really shines. VA loans require no down payment, meaning a buyer is limited far more by income (that is, how much they can afford on a monthly basis) rather than savings (how much they have saved in the bank at the time of purchase). The underwriting guidelines are less stringent than for conventional or even FHA loans, so borrowers with past bankruptcies, foreclosures, or poor credit will find it easier to qualify. Interest rates on VA loans are typically a quarter to a half-point better than conventional products. And the VA offers a plethora of housing counseling and homeownership resources for veterans at no cost.
The unique demands of the military lifestyle require unique financing solutions. Veterans aren’t likely to stay in one place for too long and therefore require access to lending products that fit this lifestyle. As both a veteran and a property investor, I understand how the VA home loan can be put to use building a portfolio of investment properties. Naturally, I encourage individuals and families to own home rather than rent. But I also encourage them to take advantage of the red-hot rental market by keeping their homes when they move rather than selling it.
The VA home loan allows a veteran to start amassing rental properties, but as there are restrictions on the types of properties that can be financed and how much can be leveraged, it’s imperative to understand all aspects of this mortgage product. As someone who has used the VA home loan for this very purpose, I have a thorough understanding of the entire process, and I’ve built a company with like-minded individuals who can share their knowledge with other veterans. It’s our way of serving those who have served.