In honor of Veterans Day, I am devoting an article to those courageous individuals who serve our country and protect our freedom. There is no greater reward than assisting our military personnel past and present, be that with their home financing needs or serving them a cup of coffee. These individuals are true heroes, and should be treated as such. We owe it to ourselves as a society to respect and appreciate the sacrifices they’ve made and to each day pay back this debt of gratitude.
As a mortgage professional, it is important for me to provide each client with the highest level of education on the products available to them. In the case of the Department of Veterans Affairs (VA) home loans, there are truly amazing products at your disposal. VA offers home purchase loans with no down payment and no mortgage insurance requirement. There is not another product like it on the market!! They offer 30, 20 and 15 year fixed options, giving the flexibility of a longer amortization or shorter term financing with better interest rates. This loan offers the best payment option of all low/no down payment products, and the caveat is that you have VA eligibility. In many cases, you will pay less towards a mortgage payment than you will rent on homes of like comparability.
You are also allowed multiple uses of your VA benefit, so don’t feel because you used this in the past you are not eligible. You will be restricted to one use at any given time, though. VA also offers refinance opportunities, which include a refinance up to 90% of the home value and a lesser documented Interest Rate Reduction Loan.
There is a funding fee that is required on VA loans and this is determined by if it is your first or subsequent use of your eligibility. This may be paid by you, the seller, or rolled into the loan. In the event you are receiving VA disability benefits, there is a chance this fee is waived as well. As with all home loans, each individual is unique and you should seek guidance from a trusted mortgage professional to learn about your options that include:
- Sellers can pay 100% of reasonable discount points and borrower’s non-recurring closing costs. They may also contribute an additional amount not to exceed 4% to be applied towards buy down points, prepaid expenses and funding fee.
- VA offers an Interest Rate Reduction Loan (IRRL) that does not require an appraisal. Great if your home value is depressed and you would still like to take advantage of today’s great rates.
- VA loans are assumable. This means your home loan could be assumed in the future if the individual qualified as you did (very favorable if rates increase).
- Properties recently listed for sale are only required to be off the market one day prior to application for the IRRL refinance.
- VA financing is available 2 years from the discharge date of a Chapter 7 bankruptcy.
- VA home loans are available to those without perfect credit histories (down to 620 with Envoy Mortgage).
There has also been a lot of discussion recently in regards to the VA funding fees, and there still isn’t resolution. The fees were set to change on November 18th, but now it is believed Congress will keep them at their current levels. It is hard to say what will take place in the future, but it seems they will not decrease at this time.
I, myself, am honored when a veteran of our great country chooses to do business with me. It means that I’m being held to a very high standard and I have been chosen based on trust and the knowledge I will do what is right for them. It is also a unique experience to give back to someone that has sacrificed so much for us.
Thank you again and God Bless the heroes of our Armed Forces past, present and future for their courage and dedication to our country!