COMMON MYTHS ABOUT THE VA LOAN:
More than 29 million veterans and service personnel are eligible for VA financing, but many don’t even fully understand these benefits. According to VA Survey Data, about 1 in 3 home-buying veterans didn’t know they qualified for a VA Home Loan. If you are or have been in the military, don’t let these common misconceptions stop you from taking advantage of the VA Home Loan benefit. Here are some of the myths (and benefits) associated with this loan:
MYTH #1: VA Loan Eligibility Expires or can One Be Used Once. Even though many veterans have already used their loan benefits, it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement. Once you’ve earned your benefit, it’s yours for life.
Click Here to Find Out if You Qualify for a VA Home Loan
Myth #2: Active Duty Military Don’t Qualify – Only Retired or Discharged Veterans can use VA Loan Benefits: Both honorably discharged and active service members get access to the VA Mortgage benefit when they meet the VA’s qualifying criteria. Check out our eligibility page for more information.
Click Here to Find Out if You Qualify for a VA Home Loan
Myth #3: National Guard / Reservists Don’t Have VA Home Loan Benefits. There are different requirements for the National Guard and Reserves members, but these members may still qualify for the same VA-home loan benefits. Check out our eligibility page for more information.
Click Here to Find Out if You Qualify for a VA Home Loan
Myth #4: VA Home Loans are Only for Purchasing Your First Home. Whether you are using your VA benefits on your first home or your twenty-first, you can use your VA Home Loan benefits to purchase a home, repair or improve an existing home (refinance). Check out more information about refinancing options here.
Click Here to Find Out if You Qualify for a VA Home Loan
Myth #5: Veterans can only have one VA home loan at a time. The VA will allow for the financing of more than one property so long as the Veteran has sufficient eligibility. The “partial eligibility” formula is complex, but we are happy to help you determine whether you would qualify.
Click Here to Find Out if You Qualify for a VA Home Loan
Myth #6: VA doesn’t do Large Loans or “Jumbo” Loans. VA Loan Limits can change every year but for the past 20 years they have been well over the average purchase price in Idaho. Additionally, the loan limit is not a cap on how much an eligible veteran can borrow. Rather, this limit helps determine how much a qualified veteran can borrow before needing to make a down payment. VA borrowers can purchase a home above the county loan limit, but doing so requires a down payment – typically equal to 25 percent of the difference between the VA loan limit and the purchase price of the home. You can find the current loan limits by clicking here.
Click Here to Find Out if You Qualify for a VA Home Loan
Myth #7: The VA Loan Costs the Seller More Money Which Puts the Buyer at a Disadvantage. It’s true that the VA limits that closing costs that can be paid by a Veteran. Some lenders require that the seller pay the “non-allowable” closing costs. At Benchmark Mortgage we waive the “non-allowable” closing costs so that neither the buyer or seller has this extra burden.
Click Here to Find Out if You Qualify for a VA Home Loan
Myth #8: VA Loans Take Longer to Process and Close. Truth: The VA Home loan can close as quick as any other type of home loan. You simply need a Certificate of Eligibility to start the process. Some Lenders have the ability to issue the CofE for you. At Benchmark, we are approved for automatic processing of VA loans. As a result your loan can be processed and closed by us without waiting for VA’s approval of your credit application… which means a VA loan typically closes in the same amount of time as any other loan at Benchmark.
Click Here to Find Out if You Qualify for a VA Home Loan
Myth #9: VA Loans are More Expensive: VA Loans, like all government loans (USDA, FHA) have a funding fee added to some of the loan amounts. This funding fee ranges from 1.75% to 3.3% for most on the purchase price. However, depending on your discharge or first-time use, this could be as low as 0%! USDA charges 2% and FHA charges 1.75%. Both USDA and FHA loans have monthly mortgage insurance on top of the upfront fees added to the loan, whereas VA loans do not. Conventional loans do not have an upfront fee, but if you go over 80%, they do have monthly mortgage insurance so in most cases you will find a VA loan to be cheaper than conventional loans as well. Also, you do not have to put a down payment on a VA loan, whereas FHA and conventional loans do require at least 3.5% or more.
Click Here to Find Out if You Qualify for a VA Home Loan
Myth #10: VA Appraisals are More Stringent than FHA or USDA Appraisals. While the VA use to be much pickier about the properties they would finance, changes in the last few years have made the VA requirements very similar to the requirements on FHA and Conventional loans. When compared to conventional loans, VA appraisals do have some safety hazards that are looked at, but this is in the Veteran’s best interest to have these items fixed before living in the home. Even short-sales and foreclosures can be eligible if the properties meet the VA criteria.
Click Here to Find Out if You Qualify for a VA Home Loan
Myth #11: Military Members Deployed Overseas Can’t get a VA-Guaranteed Loan. The VA loan program is focused on helping veterans and service members purchase homes they will live in year-round as their primary residence. These aren’t for buying vacation homes or investment properties, however, there are exceptions to the occupancy requirement, the most common being that a spouse can fulfill it on your behalf.
Click Here to Find Out if You Qualify for a VA Home Loan
Myth #12: Qualification Standards are Harder – The Veteran Has to Have Perfect Credit to Use the VA loan. The VA loan is one of the most lenient loan programs when it comes to past credit hiccups. Depending on the circumstances, there are even instances when you may use your VA Loan just 12 months after a bankruptcy and/or foreclosure. We would be happy to discuss your scenario with you directly to determine whether you will qualify.
Click Here to Find Out if You Qualify for a VA Home Loan
Myth #13: Widows, Widowers and Surviving Spouses Don’t Qualify for VA Mortgages. The VA offers a variety of benefits and services to spouses of service members who are deceased of permanently disabled including home loans.
Click Here to Find Out if You Qualify for a VA Home Loan
Myth #14: My Bank Turned Me Down So I have to Rent
The VA has “underwriting” guidelines that you must meet in order to qualify for a VA home loan. Banks, online lenders, and credit unions have the ability to impose additional criteria or “overlays” that are more stringent than the VA rules. It can be heartbreaking to find out that some of the most restrictive overlays are in place are with lenders and credit unions that cater to the military. Some of these military specialists are amazing for car loans, investments, and insurance but fall short when it comes to home loans. Why is this? Mortgages are highly complex financial instruments and are often outsourced. Some of these lenders even have “preferred relationships” with the realtors and lenders asking for a portion of their commission. This isn’t always a formula for happy clients. Please don’t take our word for it. Be sure to look at a lender’s online reviews. In some cases, you will find that over one-third of their loyal clients left a one-star review for their VA loan service. If they were a restaurant, would that be the equivalent of finding a cockroach in your food?
It doesn’t feel great to point this out, but as VA advocates we are frustrated hearing these sad stories for more than a decade. You have earned your VA home loan benefits and you deserve a second opinion if you’ve been turned down. Even if you don’t qualify now, we will help you create a step-by-step plan that will help you on your path to buying. Check out our testimonials here and call us today! We look forward to hearing from you! (208) 287-1705 Or click below for more information…
Click Here to Find Out if You Qualify for a VA Home Loan
To apply for a Zero Down VA Home Loan and find out more about whether you qualify call one of our VA Home Loan Specialists at (208) 287-1705 or apply online!
