If you are a military home buyer, VA loans represent some of the most powerful lending opportunities on the market. They are flexible, and require no-down payment. Offering a unique advantage that no other home buyers on the market can get. However, it’s important that Veterans stay up to date on the latest benefits and fully take advantage of these opportunities.
If you are not familiar with a VA loan, it is a mortgage loan program established by the United States Department of Veterans Affairs to help veterans and their families obtain home financing. VA loans offer up to 100% financing on the value of a home. To qualify for a VA loan, borrowers must present a certificate of eligibility. Which establishes their record of military service, to the lender.
What Can I Afford With a VA Loan?
Finally, there is lots of information out there about what loan is right for you, it’s important that you talk to someone who is upfront about what truly works in your best interest. It’s not uncommon for brokers to casually steer you away from VA loans. This is because of the required appraisals and inspections that real estate figure will hurt the house on the market, due to the extra time it takes to get the house ready. It’s true, in extremely competitive home buying markets; this could put you at a disadvantage. Most of the time, this is not going to be the case.
Here’s what service members need to know:
In conclusion, think you understand what a VA loan is? Chris Birk, author of “The Book on VA Loans” gives 10 unique rules and quirks about VA loans.
- They’re reusable. You can use your full VA entitlement over and over again as long as you pay off the loan each time.
- They’re only for certain types of homes. If you’re planning to buy a working farm, a downtown deli or a fixer-upper, the VA loan may not be for you. It’s mainly designed for properties in “move-in ready” condition, including single-family homes, condos, modular housing, some multi-unit properties and more.
- They’re for primary residences only. Don’t bother trying to use your VA loan benefits to buy an investment property or a vacation home in the Poconos. VA loans are for primary residences, with few exceptions.
- They’re not issued by the VA. The VA isn’t in the business of issuing home loans. In addition, the agency provides a guaranty on each qualified mortgage loan.
- But they’re guaranteed by the government. If you have a VA entitlement, the agency typically guarantees up to a quarter of the loan amount. The guaranty gives lenders confidence and helps service members secure great terms and rates.
- They’re available despite foreclosure or bankruptcy. Service members with a history of bankruptcy or foreclosure can secure a VA loan. Even borrowers who have had a VA loan foreclosed on can still utilize their VA loan benefit.
- They don’t have mortgage insurance. Mortgage insurance is a monthly fee you pay with other programs when you’re not putting at least 20 percent down. The VA’s guaranty eliminates the need for any mortgage insurance or mortgage insurance premium, helping borrowers save even more money each month.
- They come with a mandatory fee. There’s no mortgage insurance with VA loans, because there is the VA Funding Fee. In addition this fee (usually about 2 percent of the loan amount) helps the VA keep the program going and is required on both purchase and refinance loans. It can be rolled into the loan amount and waived entirely for those with service-connected disabilities.
- They have limits on co-borrowers. Some loan programs let you get a loan with just about anybody. That’s not the VA loan program. Having a co-borrower who isn’t your spouse or another veteran with VA loan entitlement who will live in the home with you will require a down payment. Not every VA lender offers these types of joint loans (Veterans United does).
- They don’t have a prepayment penalty. Furthermore, you can make extra payments any time you want, saving you a boatload in interest over the life of your loan. You can even structure your payments to automatically deduct a little extra every month. Just an extra $100 per month can shave years and tens of thousands of dollars from the balance.
Check out and buy his book here.
EGA Homes – Military Housing Division For Our Veterans
EGA Homes is a Veteran ran division within Coldwell Banker Blackstone. We understand the challenges Veterans face in transitioning into civilian life. Therefore EGA Homes will provide opportunities, training, education, and resources to help Veterans take full advantage of their benefits. Another reason to consider EGA Homes is being able to work directly with another Veteran in business. Consequently, you are helping a veteran earn a living for their family and community.
In addition, this division is a certified DVBE (disabled veteran business enterprise) and members of the Disabled Veteran Alliance. Making us one of the most qualified divisions in Southern California to help navigate your real estate needs.
If you would like a quick snapshot of what your monthly payments would look like under a VA loan, Call 951-977-3421 or email [email protected] to receive a FREE, no obligation estimate of what best fits your budget.