The increase of mortgage rates in 2023, coinciding with inflation, isn’t just a barrier for the average homebuyer. Even military veterans with additional advantages are finding a hard time securing a home purchase. In fact, the very fact that veterans tend to use the benefit available to them, the powerful VA loan, their bids are working against them with sellers who don’t want to deal with all the government paperwork and prefer a fast sale.
Market Dynamics Favor Speed
When it comes to preference, it’s not that people don’t want to sell to a veteran homebuyer per se. A combination of factors are working against a VA loan financing bid that otherwise wouldn’t be as much of an issue. Inflation has people scared, which in turn has caused many sellers to stay out of the market, worried they too can’t buy in later on. That reduces inventory. Mortgage rates have risen to their highest since 2000, which decreases the number of affordable homes, also squeezing inventory for vets. Time matters as many sellers are looking to park their sale funds into another property before prices rise further. So, all the above pushes for fast sales, which a VA loan with its increased amount of paperwork doesn’t make easy. Ergo, when choosing between a veteran’s bid or a cash down bid, sellers opt for the cash down sale instead.
Financing Still Works
Denver VA loans are still functional and viable to buy a home with; nothing is broken with the VA lending system and its consistent performance and success in veteran home purchases. The market is fixated on convenience of sales and, in a seller’s market, the seller dictates the terms, not the buyer. Not surprisingly, the number of veterans surveyed about whether they would be buying a home in the next 12 months has dropped considerably, down a quarter from the last three months and half from the middle of summer. Interest rates are the first barrier and the acceptance of the VA loan is the second.
Ironically, VA loans are now more important than ever for veterans to secure homes, especially with the rising prices in home markets in general.
Help for Veteran Buying
A mortgage broker’s assistance is one tool veterans can definitely take advantage of in challenging markets. By simply opening up the financing market to a wider range of lender possibilities, a broker can produce more options and potentially easier financing for a veteran than a limited field of local Denver banks alone. And that can also include lenders who can process VA loan paperwork faster and more efficiently than institutions who only handle such purchases occasionally. Any veteran struggling with the current Denver home market can benefit from considering a mortgage broker right now. 2024 doesn’t look to be much easier with any big changes on the way, and sitting out of the market might end up being priced out even further with rising home values and limited inventory. So, talking to a broker right now is a very good idea.