It’s unfortunately a little-known fact: The VA home loan program is designed to give those who have served in the U.S. armed forces a well-earned leg up on the American dream of homeownership. In an effort to increase homebuying among members of the military, the Administration of Veterans Affairs Home Loan program offers significant advantages over other types of mortgages.
VA mortgage loans are loans that have been established by the US Department of Veterans Affairs, allowing veterans, active service members, and surviving spouses a homebuying option with many advantages. These advantages include little to no money down, no required private mortgage insurance, and highly competitive interest rates.
While VA loans are very advantageous for the buyer (not to mention sellers and lenders as well!), many eligible buyers aren’t aware of the benefits – or often that they’re even eligible! Often times, an inexperienced realtor or mortgage company will shy away from the entire process if they’re unfamiliar with the processes of qualifying and applying for a VA loan. At Evolve Home Loans, not only do we work with realtors that can help guide you through the VA loan process, our team is ready to assist you and answer your questions.
We also understand that many questions may come from myths and misinformation about these loans. We’d like to address some of these myths right now, and help separate fact from fiction.
MYTH: If my property costs more than the allowed maximum, I will not be able to buy it.
FACT: Although loan limits used to be in place, a buyer was still able to buy above the limit with a down payment on the difference. However, as of 2020, there is no longer a maximum limit on VA loans for buyers with full loan entitlement.
MYTH: Taxpayers are left to assume the risk of a VA home loan.
FACT: A VA loan is insured by a funding fee paid by the borrower (2.3% of the total amount borrowed for first time borrowers). This relieves a bailout liability to the taxpayer, unlike Fannie Mae and Freddy Mac loans that had to rely on taxpayer money for bailouts in the past.
MYTH: A previous foreclosure will prevent you from obtaining a VA home loan.
FACT: A foreclosure will not prevent a buyer from obtaining a VA Loan. While there can be a two-year seasoning period before becoming eligible, this is still much better than a conventional loan, where the seasoning period can be up to seven years.
MYTH: A VA loan is too complicated.
FACT: VA loans do have some different qualifying requirements, and education on the process is necessary to navigate through the process. However, a knowledgeable realtor and lender can make the difference between a complicated process and an easily guidable one. At Evolve Home Loans, we have an experienced team that is also able to connect you with a knowledgeable realtor to answer all of your VA loan questions throughout the entire homebuying experience – don’t hesitate to contact us today!