Common Myths Regarding VA Loans
1. Other Types of Financing are Easier to Qualify For.
Simply not the case. VA Loans have a very high allowable debt-to-income level and the underwriter can manually approve a loan if it is a make sense loan. VA Home Loans also have very forgiving credit score and history requirements allowing for as low as 600 credit for some lenders, and VA deems credit repaired if the borrower has 12 most recent months of on time payments.
2. The VA Loan Amounts Are Too Low
The VA loan has very high loan amounts with zero money down. Talk to your lender about the max zero down amount in your area, but they can range from $417,000 to $721,050 depending on where you plan to buy. In fact, after the 100% financing threshold VA loan amounts can go as high as $1,500,000 or more with a small down payment requirement.
3. VA Loans Take Too Long to Close
Working with experience VA Home Loan Purchase Lenders allow for the same turn times as conventional and FHA loans, and the VA loan has a much higher chance to actually close. Since VA allows for higher debt to income ratios and flexible underwriting the loan has less chance for costly calculation mistakes unlike other more conservative products like conventional financing.
4. I Can't Use My VA Loan Twice
You can use your VA loan as long as you have remaining entitlement and/or paid off your existing VA home loan. Each county allows for a max 100% Financing VA Home Loan amount, so theoretically if you used half your entitlement you could move out of one owner occupied home, keep the home as an investment property and use your remaining entitlement on a new owner occupied home. For more explanation on this and how to grow your wealth in real estate using your VA Home Loan Benefit please contact your local Veteran’s Choice Home Loan VA home loan specialist.
5. The VA Appraisal is Too Conservative
The appraiser on a VA Home Loan is not going to give a lower value on a property than other types of financing.It’s not what they do. Their job is to give a fair unbiased value on the home regardless of the type of financing.The appraiser also has to look for standard minimum property requirements which means their job is to make sure the property is safe and sound for you to buy. Unpermitted areas are not allowed, but there is a process of getting an exception to those areas from the VA office if a licensed contractor issues a letter stating the area appears to be built to code in a workman like manor. Condominium homes do need to be approved on the VA Condo Approved list, but if not on the list it is possible to get the Condominium approved by your VA Home Loan Specialist at Veteran’s Choice Home Loans.
6. VA Rates Are The Same No Matter What The Loan Amount Is
Generally, VA Rates offered to a customer can differ. The loan balance and the credit score of the borrower can increase the loan rate or the cost associated with a specific rate.
7. There Are No Closing Costs On A VA Home Loan
There are closing costs on VA Home Loans just like any other type of residential loan, but there are fees that cannot be charged to the borrower that may differ from other products. It is also common in most states to offer higher interest rates that yield lender credits back for the borrowers closing costs.