VA Loan Myth Busting

So many times I hear from selling agents, and even sellers, “ Do I want to Accept a VA Loan?”, “Don’t VA Loans Require a ton of Repairs?”, “ Closing will be delayed with a VA Loan”…the list truly goes on and on.
What I have find in my time in this industry with other agents and sellers, people simply have been misinformed over the years. The “rumors” for lack of a better term keep progressing like a tumble weed, and are never dispelled.
I would like to dispel some of the VA loan myths for you today, below!

1.  The VA Loan is one of the strongest loan programs out there.
For our military families, the U.S Department of Veteran Affairs (VA) GUARANTEES this type of loan.
The VA does not have a minimum credit score for our service members who utilize this loan, so it opens the playing field to many families and given that the loan is guaranteed by the VA, it is often a quicker loan process than that of other loan types.

2. Specifically speaking to those who have access to this loan type some benefits include a no down payment loan type, very competitive interest rates, and no PMI (privatized mortgage insurance).

Now, I know what some may be thinking, “They probably don’t have any money
so they are not qualified.” FALSE. Just because their loan type does not require money down, does not necessarily they do not have it. In fact, in a competitive market for sellers, a #sellersmarket, this could be a benefit to you. By not having to put down funds for their loan, they can save these funds for home repairs, offering to cover some of your closing costs, etc. I have seen military members purchase million-dollar homes before and not put a penny down for a down payment! A VA Buyer can counter act this assumed thought by placing a large binder deposit down.

3. A VA home buyer can also use a VA Loan more than once; meaning, this may not be their first-time use, and they could have other properties under their belt, #investmenthomes. This shows as assets to the lender and helps strengthen their credibility and finances on a lender side. Sellers often jump to the conclusion that since a borrower is using a VA loan, they are tight or low on funds, or a first-time home buyer. This truly could not be farther from the truth.

4. A VA loan does not take longer to close than say a conventional or FHA. On average, most lenders can close a VA Loan in 35 days. It does vary by lender, we always recommend using a local lender in the city you are purchasing in. If the service member has their certificate of eligibility already in hand when they apply for the pre-approval, a 30-day close is no problem at all. Additionally, did you know? A VA appraiser only has 10 days to return the report once they accept the order from the VA Portal. YES! They are on a time table which aids in helping the transaction stay moving along. Whereas FHA, Conventional, and USDA appraisers are not tied to a schedule.

5. “Won’t the VA mandate all these repairs on my home?” The only inspection the VA requires is for the borrower to have a clean WDO (Wood Destroying Organism Report). This report checks for termites (Live or Past Damage), Wood Rot and Beetles. If the report comes back with any of these items, yes, the seller will have to make repairs on these items in order for the buyer to obtain a clear WDO report financing. If the seller has had regular treatment for pests and bugs, or a termite bond, they should feel confident about this. In a #sellersmarket, a VA buyer may even offer to pay for the WDO repairs. A Seller can always ask and use this as negotiation! The VA does not restrict whom can pay for the report or the repairs if necessary.   In addition, the VA ultimately looks for “Sound and Secure”. They do not have exact restrictions on roof age, etc. As long as the home is sound and secure, there should be no problems with the loan process!

6. Tidewater- Did you know? If you accept a VA Offer, and the appraiser is having a hard time finding comps (recently sold homes) to compare the subject home too for the appraisal, the VA appraiser actually notifies the lender, and in return the listing agent actually gets 48-72 hours to submit documentation and comps they used to price the home. This is a huge step up! This is not how it is does for an FHA or Conventional offer. You can fight for your price!

Those are the most common Myth’s we have heard over and over throughout the past years. We hope to have debunked a few negative thoughts many sellers (and even agents) have on the VA Loan. Don’t be afraid to accept a VA Offer!