VA Loans Can Help Veterans Achieve Their Dream of Home Ownership
myths and what to know
Brent discusses the benefits and things to know when utilizing a VA loan.
More of a reader? Catch the video transcript below!
Today we’re talking all about VA loans!
I’m located in San Diego, and we’ve got a huge military community here. I work with a lot of military men and women who use VA loans to purchase their homes because it’s such an awesome tool to help them achieve homeownership sooner.
What are the pros and cons of VA loans?
The Pros
VA loans offer programs that allow individuals in the military community to buy homes with 0% down at very competitive rates.
Real estate is a massively important tool in the overall wealth-building process. By allowing 0% down, military men and women can reach their goal of homeownership sooner, springboarding them toward wealth building earlier than they may have otherwise been able to.
Something a lot of people don’t know is that the VA actually doesn’t fund this loan - the banks giving the loan do. So, why are banks willing to loan 100% of the value of the home without you coming in with a down payment?
The Cons
They require you to pay a fee upfront - this is one drawback to the VA loan. This “funding fee” is essentially insurance for the lenders to protect their investment. Your funding fee basically goes into a pool of money made up of all the funding fees paid by other people participating in the VA loan program. The good news is that you can roll it into the loan (most people do).
Some of you might be thinking, “Why is the taxpayer funding real estate loans? This is not a taxpayer-paid program!”
Again, the insurance pool is funded by the VA funding fee. So, it’s paid for by men and women who utilize this program.
VA Loan Myths
Myth: You can only use the VA loan once.
This is just not true! You can take advantage of the VA loan several times. You’ll want to consider that your funding fee does go up slightly with each subsequent loan, though.
Myth: The government supplies the VA loan.
The government is not involved in VA loans at all. Regular banks lend the loan to borrowers. VA loans are subject to generally the same provisions as an FHA or conventional loan.
Now, before the mid-90s, VA loans did have to go through the Department of Veterans Affairs before the loan could close. Because the government was involved, there was a longer process, more delays, and more requirements involved.
Now, the process is much more streamlined - lenders no longer need to go through the government at all.
Myth: VA appraisals come in low.
The VA requires that the property is safe, sound, and sanitary. That’s no different than an FHA or a conventional loan.
Note: the VA does require that you have termite clearance, which isn’t a requirement of some other loan types.
Start Your Wealth-Building Journey Earlier with VA Loans
Just like any loan product, there are pros and cons associated with VA loans.
But, they are a great way for members of the military community to take advantage of the benefits of homeownership and begin building wealth for themselves and generations to come.
If you have any interest in a VA loan or you want to know if it’s right for you, connect with us and we’d be happy to answer any questions you have!
Brent Edwards (aka Brent the Broker) is a residential real estate agent and Realtor in San Diego, CA who helps clients buy and sell homes in San Diego, California and all surrounding areas. Brent is a highly-recommended Realtor in San Diego by family, friends and past clients. Call Brent today at 619-550-8070 if you have any questions about real estate in San Diego or you'd like to buy or sell a home.
