Low housing inventory means homeowners are flooded with multiple offers. With the VA Loan, though, veterans and active duty servicemembers have benefits that can give you an edge. One myth about VA loans is that the appraisal and closing process is tougher, but it’s not really true. The entire VA loan timetable is generally on par with conventional loans, and can be done in as little as 30 days, making it similar to conventional fast-close programs.
The appraisal process takes about the same amount of time as a regular appraisal. The main difference is that fixer-uppers are not allowed – the home must be in safe, sound, and sanitary condition. It helps to choose a REALTOR® who has solid experience helping military clients, as they’ll know which homes for sale today to avoid. We work with several, so ask us for a referral!
You may have heard that VA loans have higher credit standards. Again, not true. The bottom credit range for most VA lenders is actually much more lenient than that of conventional loans. If you’ve had a bankruptcy or foreclosure in your past, the VA loan is actually much more forgiving in that the waiting period is shorter before you can get a new loan – only 2 years post-foreclosure or Chapter 7 bankruptcy (vs 3 and 7 years for conventional loans) and as little as 12 months for a Chapter 13 bankruptcy. Talk to us if this is in your history.
Perhaps the most well-known benefit of the VA loan is the 0% down payment requirement. This lets you preserve cash. Having cash gives you options, which gives you a leg up on other buyers bidding on a home you want. In fact, and to bust another myth, you can even use VA purchase loans on foreclosed and short-sale properties - - and with no money down, this gives you a huge edge over other buyers who have to come up with 20% down to satisfy conventional lenders. As long as the property is (you guessed it) safe, sound, and sanitary.
VA loans also include the VA funding fee – a one-time payment that may range from 1.4% to 3.6% for a purchase or construction loan. A little-known fact is that this fee can be paid up front or rolled into the loan amount, and if you have available cash to use as a down payment, you can reduce it significantly by putting either 5% or 10% down. There are also exemptions to the VA funding fee (for veterans with a service-related disability, or those who have received the Purple Heart).
Another myth is that servicemembers deployed overseas aren’t able to buy a home remotely or meet the occupancy requirement. Military members stationed overseas can use a Power of Attorney (POA) to appoint a spouse or someone else to handle the VA loan transaction, including signing! A spouse can meet the occupancy rule (moving in within 60 days), or you can get an extension of up to 12 months to occupy the home. There are a few details, so contact us for more info if this is your situation.
Remember, loan limits were eliminated for most VA loan borrowers last year, letting you bid on just about any house you can qualify for!
The VA loan advantage can be beneficial in today’s competitive market. If you’re a veteran or active servicemember, we can help you with the right strategy.
Free VA Loan ConsultationTo find out more or start the process, call us at 808-566-6611.
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