There are a lot of myths swirling around about VA loans, so before you believe everything you hear, take some time to look into the facts about your benefit. Please reach out if you have any questions. I can put you in touch with one of the great lenders I work with if you’re looking for more details on your loan options.
MYTH 1: Only combat veterans are eligible.
FACT: Veterans, active duty servicemembers, reservists, National Guard members, surviving spouses, and other individuals can earn eligibility for home loan benefits. You may be eligible if you are a(n): Military Veteran, Active-Duty service member, Reservist or National Guard member, Surviving Spouse, Academy Cadet or Midshipman, National Oceanic & Atmospheric Administration (NOAA) Officer, Public Health Service (PHS) Officer.
MYTH 2: You need perfect credit to be approved.
FACT: While the VA encourages approved lenders to provide VA loans to all qualified applicants, it does not describe a minimum credit score. Each lender has its own credit requirements, which they use to verify that borrowers meet the ability to repay the loan. Lenders are expected to use good judgement and flexibility when applying the VA’s underwriting recommendations for credit, debt, and income. Typically, a score in the 620s or better is needed to apply for a VA loan.
MYTH 3: You can only use the VA home loan benefits once.
FACT: If you earn a VA home loan benefit it is yours for life. Many Veterans use it again and again for their home financing needs. Depending on the value of each property you buy, you may or may not need to restore entitlement to reuse your benefit. As long as you have enough entilement to back your loan, a VA loan can be a great mortgage choice for all stage of life.
MYTH 4: VA loans have a higher interest rate.
FACT: VA loan interest rates are usually as low or lower than competitive rates on conventional loans..
MYTH 5: VA home loan benefits are only for purchasing single-family homes.
FACT: VA loans can be used for: single-family houses, a condominium unit in a VA-approved complex, a multi-family property (up to 4 units per VA-eligible borrower), building a home, buying & improving property, making energy efficient improvements, buying a manufactured home and/or lot (certain lenders), refinancing your VA loan for a lower rate or payment, cash-out or regular refinance your VA or non-VA home.
MYTH 6: VA loans have unexpected out-of-pocket costs.
FACT: In fact, VA loans are known for their benefits, including no pricate mortgage insurance (PMI) and, in most cases, zero down payments. As far as other out-of-pocket costs go, you should recieve a Good Faith Estimate from your lender. And there should be no surprise fees at closing time. You can expect to pay a VA funding fee (unless exempt), an appraisal fee, an origination fee, title fees and some other cost approved by the VA.
MYTH 7: VA occupancy rule is too hard for active duty serving overseas
FACT: VA requires owner occupancy within a reasonable time after closing – usually 60 days. But those serving away on active duty can recieve an extension of up to 12 months if needed. If the active duty member still can’t satisfy the rule, a spouse or dependant child can.