A VA loan is a government-backed loan program that is designed for veterans. However, with so many stories about this type of loan, many people are hesitant to get one because of fear that they could go wrong.
The truth is, the VA has backed more than 22 million home loans since the program was introduced in 1944. In turn, it has enabled millions of veterans to have homes of their own.
Don’t you worry; we’re here to debunk the common myths that surround VA loans.
1. A Perfect Credit Score Is Necessary
VA indeed encourages lenders to provide VA loans to all qualified applicants, but it doesn’t involve a minimum credit score. Each approved lender has its own credit requirements that is used to verify the borrowers’ ability to repay the loan. Lenders are expected to use good judgment and flexibility when applying the VA’s underwriting recommendations for credit.
2. Combat Veterans Are the Only Ones Eligible
This is not true. Veterans, active-duty service members, reservists, National Guard members, surviving spouses, etc., are eligible for home loan benefits.
3. VA Home Loan Benefit Can Only Be Used Once
Definitely not true. If you are eligible for a VA home loan benefit, you get it for life. In some cases, you can use it multiple times at once.
In fact, many veterans use it again and again for their home financing needs. For example, you can use it to get a starter home, and then you can use it again to upgrade to a bigger home as your family grows. In some cases, you can also use it again to refinance your home for a lower interest rate or get cash out of your home’s equity.
4. VA Appraisal Will Take Too Long
VA appraisals don’t take any longer than conventional loan appraisals. When you have signed a purchase contract, the lender can order the VA appraisal, and then the VA will dispatch it to the next available appraiser. With that, appraisals can take 7-28 business days. However, in AZ VA appraisers must return appraisal within 14 days and often comes back faster.
5. It Comes With Unexpected Costs
This is not true because VA loans are known for their benefits, such as zero down payments and no Private Mortgage Insurance (PMI). About 90% of all VA purchases have been made with zero down payment since the program’s inception—so no, it’s not too good to be true.
As far as unexpected costs go, you will receive a Good Faith Estimate from the lender. There shouldn’t be any surprise fees at closing time. What you can expect to pay are:
Funding fee (unless exempt)
Other costs approved by the VA
You can pay these fees upfront or roll some of them into the loan. You will also have the option to negotiate seller-paid fees in your purchase contract.
Get Your VA Loan Now
These are the common myths about VA loans. Now that we have debunked them, you can now confidently apply for a VA loan and live the American dream because you deserve it!
Buy a home near Luke AFB today. We can help you here at Desert Heroes! Our group of experienced and licensed real estate agents continues to help military families who are serving Luke AFB and beyond. Contact us today.