MReport March 2018

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26 | TH E M R EP O RT FEATURE U .S. politics today teaches us that we are often unaware of what's true and what's not. It requires taking a close look to separate fact from fiction and myth from reality. That's also true in our line of work. If you've been in the mort- gage business for any length of time, you know there has always been an abundance of false ideas about mortgages that the public is eager to buy into. Many of these myths can be very damaging. George Orwell once said, "myths that are believed tend to come true." As members of the mortgage industry, I consider it our duty to dispel these myths to help our nation's veterans. After all, our veterans deserve it. Myth 1 Veterans Are Credit Risks T here is some evidence to support this myth. Many veterans do not have a long credit history and military families are likely to have higher credit card debt than average households. In addition, the unemployment rate for those leaving active duty tends to trend higher than the overall unemployment rate. These facts might suggest that veterans do not make good borrowers. But these stats don't tell the whole story. The truth is that veterans, on average, are better educated, make more money, and have better ben - efits than the average consumer. They are also, on average, more financially responsible than the average borrower when it comes to making mortgage payments. Yet, they have unique hurdles compared to average borrowers. When you serve in the armed forces, you have most of your basic needs taken care of, includ - ing room and board. As a result, veterans may find themselves less experienced in financial mat- ters than the average borrower. Enlisted men and women also move frequently and spend long periods overseas. This often does not help create a consistent financial profile. In addition, many who are serving in the military have the long-distance burden of maintaining a family and house - hold back in the United States, which can be financially difficult and enormously stressful. Once they leave the military and enter the relative stability of civilian life, on the other hand, most veterans are extremely responsible with credit. They also place enormous value on trust and meeting one's obligations, which makes them excellent borrowers. Myth 2 Veterans are Better Off Getting a Conventional Loan N ot only is this a myth, but also it is a very dangerous one from a financial standpoint. VA loans enable eligible veterans to buy, build, or refinance a home without a down payment and ongoing monthly insurance pre - miums. There are no minimum credit score requirements and VA rules limit the amount a veteran can be charged for closing costs. In today's market, there are no other types of mortgage loans that provide this type of benefit on an ongoing basis. Most conventional and non - conventional loans, for example, require a 3 percent or higher down payment for first-time homebuy- ers—if they qualify. Right now, the median price of a U.S. home for sale is about $260,000. That gener- ally means a first-time buyer needs a down payment of about $8,000, not including the costs of inspec- tions, title fees, moving costs, and the many other expenses that go into buying a home. In other words, from a veteran's point of view, getting almost any other type of mortgage except the VA loan program makes no sense. However, this myth continues to survive because the majority of lenders do not understand how VA loans work and are simply less comfortable offering them. Myth 3 There's a Time Limit for Eligible Veterans to Use Their VA Mortgage Benefit T his is just plain false. There is no time limit for a vet- eran to use their benefit. And they can use it as many times as they wish, as long as they sell any previous home bought with a VA loan. In fact, a significant percentage of veterans have used their benefit multiple times. Every day, more military veterans are retiring from active duty. Many are looking forward to taking advantage of an improving economy and putting down roots Ensuring Veteran Lending is in Safe Hands Here are the top five VA loan myths that damage the industry and the truth behind them. By Hon. Joseph J. Murin

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