VA Loans FAQ Part 2: How to Sell VA Loans
Here’s the biggest problem with VA Loans: most Active Military Personnel and Veterans are not aware that they have access to this EXCELLENT program. The military does not do a great job of educating them about their benefits, so they just don’t know about them. One of the best programs available for Veterans (besides 10% off everything at Home Depot) is the VA Mortgage Loan program, which provides low-cost Home loans for Active Military Personnel and Veterans. So, it often falls to loan officers and agents (REALTORS too!) to educate the consumer. If you haven’t done so yet; check out Part 1 of this series: 10 Common Myths about VA Loans, for a quick list of the 10 most common misconceptions that people have about their VA benefits.
The main purpose of the VA home loan program is to help veterans finance the purchase of homes with favorable loan terms and at a rate of interest which is usually lower than the rate charged on other types of mortgage loans. For VA housing loan purposes, the term “veteran” includes certain members of the Selected Reserve, active duty service personnel and certain categories of spouses.
- Veterans Affairs Pamphlet on VA Home Loans1
Phew! In plain English, here are the selling points of the VA Loan program.
- 0% Down-payment
- Market-Competitive Rates
- No Income Restrictions
- More Flexibility on Credit and DTI
- Home Energy Efficiency Upgrades in the Loan
The Veterans Administration (VA) Mortgage can be accessed by all veterans and active military (including military reservists), and never expires. It is not the same as other government sponsored programs, which can take a long time to close or require Mortgage insurance. This benefit is reusable, and can be used to purchase or refinance a home. In fact, this benefit can be used to purchase up at a 4-unit dwelling, as long as the borrower will make their primary residence in one of the units.
The application process is not more difficult than a normal mortgage application, as long as the lender is well-acquainted with arranging VA Mortgages. Your lender makes a difference; lenders who are VA Approved are the only ones allowed to directly access the VA Loan Program. Once you apply, you need to have an appraisal. These appraisals are not substantially different than a conventional or FHA appraisal, except that they are performed by a VA assigned appraiser. In fact, if the appraiser decides that the property qualifies for energy efficiency upgrade, these upgrades can be financed as part of the loan. VA Loans have no downpayment, no mortgage insurance, and reduced closing costs; rates are comparable to similar conventional or FHA rates. VA Loans are more flexible on credit and DTI and there are no income restrictions on this program.
If you have any other questions or want to get yourself or someone else prequalified, Send us an Email, Leave a Comment, Tweet us or Call Us – no sales pitches, we want you to still like us at the end of the day!Footnotes
- http://www.homeloans.va.gov/pdf/vap_26-4_online_version.pdf [↩]