Using your VA home loan - Have any tips?

[jdben92883]

VA loans are usually good loans. Right now I'm writing 3.75% 30-year fixed loans which leaves about a point to credit towards your closing costs.

As mentioned, the appraisal is the most strict and the appraisers are allowed up to 10 days to complete the report. Also, a termite report will be required and some lenders require both section 1 and 2 work to be completed. If the home is in good condition, the appraisal and termite won't be an issue and in practice, all of my recent VA appraisals have come in just as quickly as any others.

If you have any disability you may be entitled to a partial or full refund of your VA funding fee.

VA underwriting is a mixed bag. On one hand, VA will let you get back into the game sooner than any other type of financing after a foreclosure, BK, short sale, etc. On the other hand, they really want you to be clean for the 12-months proceeding the loan. Even with a qualifying FICO, credit issues inside of the past 12 months can cause an issue.

As mentioned, some listing agents don't like VA loans because there's a perception that they're harder to close. I am both a real estate and mortgage broker, so I personally don't care what kind of financing a buyer comes in with because I'm going to scrutinize the loan pre-qual through the eyes of a loan guy. Most all good loans will fund regardless of the financing type. If the home had known issues, that's another story.

As mentioned, the only loan that really competes with VA is a USDA loan. It too is 100% financing and can be used in a lot of communities that many people don't consider rural. The major challenge to USDA financing is the income requirements...it's a very fine needle to thread. Easy to make too much/too little.

BTW...Dave Ramsey is woefully mistaken on his website. He mentions that VA rates are generally higher than conventional loans and have more fees. Both statements are ridiculous. VA and FHA carry the same rates and both are .5% LOWER than conventional rates. If you have poor credit, conventional will beat you up even more. VA loans LIMIT the types of fees that the buyer can pay, so the fees should generally be lower. Where veterans get screwed, is they often think their VA lender has their back and they end up paying higher origination because they mistakenly trusted their loan officer as a good guy. The higher fee is a result of the borrower not performing due diligence and shopping rates, not due to any shortcomings of VA financing.

Good luck and thanks for your service!

[ElDub1950]

Beware of realtors who are so called "VA Specialist". Mine was supposedly helping me with my first house and the loan too. He and his buddy, the mortgage, broker screwed me out of a couple grand.

[pitbull30]

VA loans are usually good loans. Right now I'm writing 3.75% 30-year fixed loans which leaves about a point to credit towards your closing costs.

As mentioned, the appraisal is the most strict and the appraisers are allowed up to 10 days to complete the report. Also, a termite report will be required and some lenders require both section 1 and 2 work to be completed. If the home is in good condition, the appraisal and termite won't be an issue and in practice, all of my recent VA appraisals have come in just as quickly as any others.

If you have any disability you may be entitled to a partial or full refund of your VA funding fee.

VA underwriting is a mixed bag. On one hand, VA will let you get back into the game sooner than any other type of financing after a foreclosure, BK, short sale, etc. On the other hand, they really want you to be clean for the 12-months proceeding the loan. Even with a qualifying FICO, credit issues inside of the past 12 months can cause an issue.

As mentioned, some listing agents don't like VA loans because there's a perception that they're harder to close. I am both a real estate and mortgage broker, so I personally don't care what kind of financing a buyer comes in with because I'm going to scrutinize the loan pre-qual through the eyes of a loan guy. Most all good loans will fund regardless of the financing type. If the home had known issues, that's another story.

As mentioned, the only loan that really competes with VA is a USDA loan. It too is 100% financing and can be used in a lot of communities that many people don't consider rural. The major challenge to USDA financing is the income requirements...it's a very fine needle to thread. Easy to make too much/too little.

BTW...Dave Ramsey is woefully mistaken on his website. He mentions that VA rates are generally higher than conventional loans and have more fees. Both statements are ridiculous. VA and FHA carry the same rates and both are .5% LOWER than conventional rates. If you have poor credit, conventional will beat you up even more. VA loans LIMIT the types of fees that the buyer can pay, so the fees should generally be lower. Where veterans get screwed, is they often think their VA lender has their back and they end up paying higher origination because they mistakenly trusted their loan officer as a good guy. The higher fee is a result of the borrower not performing due diligence and shopping rates, not due to any shortcomings of VA financing.

Good luck and thanks for your service!

Thak you for the detailed reply. I might be sending you a PM in the next couple weeks.

Beware of realtors who are so called "VA Specialist". Mine was supposedly helping me with my first house and the loan too. He and his buddy, the mortgage, broker screwed me out of a couple grand.

Do you care to elaborate on this? All of us Vets can likely learn something from this thread.

[ElDub1950]

Do you care to elaborate on this? All of us Vets can likely learn something from this thread.

Well, the exact details probably don't apply because this was 1980, but the basics were that I was buying my first house with my VA Loan. I only knew enough to know that I didn't know enough so I went with a real estate agent who advertised himself as a 'VA Specialists - here to help vets through the home buying process'. He hooked me up with a VA Loan Specialists that turned out to be his buddy.

The realtor and his buddy came up with bogus numbers about how much I could increase my monthly take home by claiming more exemptions that my interest credit would cover easily, and other outrageous statements about tax credits for my new baby, etc, and used those bogus savings to convince me to buy a house beyond my budget. Then he and his VA Loan buddy delayed my closing until a new reg went into effect where both of them could earn additional fees. Then delayed a few more days until the interest rate jumped a full point (in 80, home loans were double digit interest rates) which all in all, put the monthly payment beyond what I could make.

That was all because I was clueless and put my trust in a slick talking (almost) con man.

The moral is, do your research on you agent. Go by personal references. Learn about the mortgage markets and again find a reputable person to deal with. Find a good tax person to help you evaluate your situation and help you plan for the tax ramifications, both + & -. If you have parents/relatives who have purchased several houses who you can get advice from, do it.

And never put all your trust in one person to cover all those issues.

[rplusplus]

I bought my first house using VA loan in East County San Diego. And no it does not always take 45 days to close. I was able to close in 19 days. VA inspector was thorough which also helped as the seller was motivated to sell and fixed the 3 items that were brought up. Even with re-inspection we made all deadlines. My realtor was really good in making sure funding contingencies were in place. Make sure and be pre approved with a lender who knows VA loans and if they try to steer you towards an non VA loan I would walk away. In fact I did as it would have cost me an additional $450 per month on my payments with PMI as I didn't want to blow my entire savings on the down. I put down 5% (16k) in the escrow account and my lender even gave back 1/2 my VA funding fees.

I am locked in at a good rate in the house I want and it was hassle free for me.