When it comes to VA loan requirements, there are a few different things that the home buyer needs to know. It all starts by debunking many of the most common misconceptions that have been allowed to take root. These myths can be harmful to the home buying process and that’s why they need to be discussed in depth.
That way, the buyer will have a more clear-headed view of how they can proceed. To learn more about the most common myths about VA loan requirements and why they are untrue, please be sure to check out the rest of this handy guide.
Aren’t The Closing Costs Going To Be The Same?
Some may take notice of the VA funding fee and start to believe that their costs are going to skyrocket, especially when it comes time to close. In reality, these fees are designed to make the process even less expensive. No down payment or monthly mortgage insurance is required at all, which also serves to drive the costs even further down. The closing costs may be a bit higher than they would be with other home types but guess what?
VA rules state that the buyer is not going to spend any more than 4% of the total home loan costs in concessions. The buyer also has the option to negotiate a better deal for themselves, just as they would with any other type of loan. Whether the buyer wants to make a higher initial offer to drive costs down later or cover other costs to reduce their closing fees, these options are readily available to them.
These Loans Are Only Available Once, Right?
There are some who may have been led to believe that these loans can only be used for a starter property and that they will not be able to obtain a second one. Nothing could be further from the truth. If the veteran is fully qualified and has a full entitlement, they are given the chance to borrow as much as their lender is currently willing to offer.
Let’s say that the buyer decides that they would like to purchase a second home that is larger than their first. There is nothing wrong with this. These loans can be obtained multiple times, as many veterans look to invest in property as a means of amassing their own personal wealth. This is not an option that can be overlooked and it shouldn’t be.
Most Veterans Don’t Even End Up Qualifying For These Loans
Since only 12 percent of veterans are currently taking advantage of these loans, this leads to a very common misconception about everyone’s qualification status. After all, if these loans were so readily available, a higher percentage of veterans would be relying on them, right? While this logic makes sense on paper, that is not the reality that most veterans are dealing with. Eligibility extends much further than most have realized and this is something that needs to be cleared up.
Active duty service members and veterans can obtain these loans as long as they are able to fulfill some relatively simple requirements. The veteran will need to have served for 90 consecutive days in wartime or 181 consecutive days in peacetime. 6 years of service in the National Guard or Reserves can also suffice. The spouse of a service member can also apply for a VA loan, broadening the pool of potential candidates even further.
By taking the time to unpack all of the most common misconceptions, veterans are able to position themselves and their loved ones for an even brighter future. The closing costs are lower, the down payment is nonexistent and no private mortgage insurance is required. Once all of these benefits are taken into account and the myths have been busted, the process does not seem as nerve wracking.
For best results, be sure to provide the mortgage advisors with all of the necessary information. They are more than happy to walk their clients through the process and let them know more about any other potential pitfalls that they may experience. It has never been easier for a potential home buyer to learn more about the ins and outs of the VA loan and how they can be utilized to their benefit.