{"id":71844,"date":"2020-04-28T17:36:52","date_gmt":"2020-04-28T17:36:52","guid":{"rendered":"https:\/\/one.sightlinemg.com\/militarytimes\/uncategorized\/2020\/04\/28\/for-veterans-seeking-home-loans-the-coronavirus-economy-is-making-things-harder\/"},"modified":"2026-08-08T07:38:32","modified_gmt":"2026-08-08T07:38:32","slug":"for-veterans-seeking-home-loans-the-coronavirus-economy-is-making-things-harder","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/militarytimes\/commentary\/2020\/04\/28\/for-veterans-seeking-home-loans-the-coronavirus-economy-is-making-things-harder\/","title":{"rendered":"For veterans seeking home loans, the coronavirus economy is making things harder"},"content":{"rendered":"\n

A home is typically a person\u2019s largest and most important asset. Therefore, whether you\u2019re buying a house for the first time or you\u2019re refinancing into a lower rate mortgage, it\u2019s imperative that you don\u2019t overpay.<\/p>\n\n\n\n

Shopping for a mortgage is important because interest rates can vary between lenders by as much as 1 percent, and in some cases, the interest rates offered to you by the same lender can vary, depending on the loan originator\u2019s commission. This is true of all home loans, including those insured by the Department of Veteran Affairs<\/a>. This means that failing to shop for a mortgage can cost you thousands of dollars in upfront costs and tens of thousands in excess interest over the life of your loan.<\/p>\n\n\n\n

While it\u2019s important for veterans to shop for a mortgage in all economic environments, it\u2019s especially important to do so during the current economic crisis caused by COVID-19. The reason? Capital is being reserved for loans to borrowers who are perceived to be the lowest risk (i.e. prime loans which are made to borrowers with high credit scores, low debt-to-income ratios, and higher down payments). This \u201cflight to safety,\u201d which is perpetuated by the uncertainty about the future of the economy, is causing an increase in interest rates for loans insured by government loans like those from the Department of Veterans Affairs and the Federal Housing Administration because these loans are perceived to be higher risk. Therefore, despite the Federal Reserve\u2019s commitment to buy trillions of dollars of mortgage-backed securities, lenders that originate the loans that ultimately go into these securities are tightening their credit standards, raising interest rates to offset risk, and in some cases, even suspending government loan products all together.<\/p>\n\n\n\t