We have had the honor to have helped many veterans get into their home with a VA Loan. Over the last 15 years we have learned some things that might help you or someone you know looking to use the VA Loan Entitlement. We want to share these with you.
- VA Loans offer some of the most competitive rates available. Lenders tend to charge lower rates for VA loans as compared to conventional loans. Lower rates mean you end up paying less over the life of the loan.
- 100% financing may be obtained by using the VA loan. In other words, you don’t have a minimum required downpayment such as with FHA or conventional loans.
- You don’t have Private Mortgage Insurance (PMI). This can save you thousands over the life of your loan; however, VA loans do have a funding fee but it may be waived for certain cases (more below).
- The VA Loan is re-useable. You can use the VA loan multiple times, not just for one home. Once you have repaid your VA loan, you may be eligible to secure another for your primary residence.
- The VA loan appraisal process is a bit more detailed than other appraisals. The house must pass specific guidelines set forth by the VA. This means in general no ‘fixer-upper’ type homes. This is to safeguard the veteran from possible safety and health issues.
- Financing requirements are more forgiving with a VA loan. Note that the VA doesn’t set specific credit scores to be eligible for a VA loan, the financial institutions do. VA loans have more forgiving Debt-to Income (DTI) ratio requirements. This means you will qualify more easily as compared to other loan types.
- If you have a service-connected disability you may qualify for a waiver of the funding fee. This also could save you thousands of dollars when purchasing your home with a VA loan.
- In the State of Florida, disabled veterans get a property tax break of $5000 for a 10% disability to a complete tax exemption for those with a 100% disability.
- Banks, credit unions and mortgage companies all have their own loan standards. One company may offer better terms than the other, so it pays to shop that loan.
- Dependent on the market a VA loan home buyer may be able to request up to 4% seller concessions. Seller concessions are money asked for by the BUYER to the SELLER to assist in lowering out of pocket costs. This will help the servicemember or veteran with any additional up-front costs when buying a home. Note that this strategy doesn’t work in a ‘seller’s market’.
- While loan officers can assist you with obtaining your Certificate of Eligibility (COE) from the VA, you are able to go to VA dot gov and start the process yourself. Having your own COE helps because it is your ‘golden ticket’ to start this VA loan process.
- Finally, almost any REALTOR can help you with your VA home loan purchase but there are some that have gone the extra mile to earn the Military Relocation Professional (MRP) Certification provided by the National Association of REALTORs. The MRP REALTORS have knowledge and experience in dealing with the VA loan process.
Remember that the VA doesn’t give out loans. Banks and financing companies do. The guidelines are similar but not the same everywhere. Don’t go with the first company you find on the internet. These companies are good at marketing and may not provide you with the service you need. Be sure to use an MRP REALTOR and they will help guide throughout the VA home loan purchase process.
Brian Warner is a Navy veteran who has volunteered his time over the years in Central Florida with several organizations while serving veterans and servicemembers use the VA loan. He works with his wife Linda who also is an MRP certified REALTOR and together they own Florida International Real Estate LLC.
