Amanda Fallon, REALTOR®
Certified Military Residential Specialist
No article about the benefits of the VA Loan would be complete without first saying thank you to our Veterans and their families. My husband is a Marine Corps Veteran and I know first hand the hardships faced by our military members and their families back home. So, again, thank you.
That being said, you’re here to find out about the benefits of the VA Loan. It is one of the best benefits that is provided to our nation’s veterans, and yet it is also one of the least-used. My husband and I used the VA Loan to purchase our current home and it afforded us some opportunities that we would otherwise not have been able to take advantage of if we had gone with conventional financing.
Did you know more than 21 million Veterans and Service-members live in the U.S. today, but only about 6% of them bought a home using a VA Loan in the past five years?
This comes down to a lack of education and understanding of the benefits of the VA Loan. As a Realtor, I have come across industry professionals who know little to nothing about this loan option and its benefits for both the Veteran home buyer, as well as the sellers of their future homes. To combat the lack of education, here is my list of the Top 5 Benefits of the VA Loan:
Top 5 Benefits of the VA Loan:
1. No Down Payment – Most conventional loans require at least a 5% down payment on a home. The VA Loan’s no down payment requirement means you no money down up to what is known as the “VA Limit.” This VA Limit is County-specific and you’ll want your loan officer to explain how this limit changes as you move from county to county. In Orange County and Riverside County, California, for example, the limits are quite different — $765.6k and $484,100, respectively, though the two counties are quite close in proximity in many areas.
Effective 1/1/2020, VA Loans will no longer follow the county loan limits! In fact, there will be no limits at all! As long as you qualify for the loan amount, there is NO DOWN PAYMENT needed. Unless you CHOOSE to put money down to lower your monthly mortgage payment and pay less in interest over the course of the loan.
2. Your Dream Home – One of my favorite benefits of the VA Loan is that it also gives the gift of extra leverage, allowing you to financially stretch in order to secure your dream home. If you fall in love with a home that has a list price above the County VA Limit, you can still qualify with minimal money down. You’ll just need to put down 25% of the difference of the VA Limit and the purchase price of the property! An amazing benefit.
Effective 1/1/20, there will be no cap on VA Loan Limits! There is no need for a down payment unless you choose to put money down in order to lower your monthly mortgage payment.
3. No Funding Fee for Disabled Vets & Purple Heart Recipients – Disabled Veterans will have their funding fee waived! Effective 1/1/2020, Purple Heart Recipients will also have their funding fees waived. Awesome! The VA Loan funding fee is a one-time charge of 1.25% to 3.3% of the loan amount, which can be rolled into the monthly mortgage payment or paid upfront.
4. Lower Interest Rates – According to Ellie Mae, the average cost of a 30-year fixed rate VA Loan was 4.15% during April 2017, as opposed to the average 4.51% for conventional mortgages and the 4.36% for FHA Loans.
5. Lower Qualification Standards – Officially, there is no minimum credit score requirement in order to qualify. In most cases, though, lenders look for a credit score of at least 620 in order to qualify for the VA Loan — below the typical minimum requirement for conventional financing. Other requirements state that the Veteran who served during wartime must have been on active duty for at least 90 consecutive days, and those Vets who served during peacetime must have served a minimum of 181 days.
Of course, there are there are a few conditions to utilizing your VA Loan Entitlement — it can not be used to finance the purchase of a non-owner-occupied property, such as a rental property or a fix and flip. Still, one of the great benefits of the VA Loan is that it can be used in the purchase of a multi-unit property where you decide to live in one of the units.
It is not a common practice, but veterans may in some instances qualify for a second VA Loan due to an order of transfer, but this depends on your Entitlement, which your loan officer can confirm for you. Also, a veteran in this situation would still need to qualify for the second VA Loan. Typically, though, VA Loans stand alone and can be leveraged again once the original property is sold and paid in full.
You should also ask your lender to confirm your Funding Fee, which will be a small percentage of the Price Price of the property. If you have a service-related disability, this funding fee should be waived.
Having a Realtor who understands the benefits of the VA Loan can really help make your home buying experience enjoyable. Your Realtor should be able to answer any questions you have about the benefits of the VA Loan, connect you with a VA Loan expert lender and begin your pre-qualification process, which is crucial prior to viewing homes on the market, as this process will educate you on your budget to know which houses you can afford. If you’d like a rough idea of how much house you can afford before speaking with a lender, you can use this online VA Loan mortgage calculator
This list is written with the intention of providing the information you need in a format that doesn’t take a long time to digest. If you’re looking for more information about the benefits of the VA Loan you can visit the VA’s website
I would love to show my appreciation for your service to our country by helping you find your dream home and connecting you with my preferred Orange County and Riverside County loan officers, who are highly educated on the benefits of the VA Loan. It is always my goal to be the Best OC Realtor for Veterans
Are you a first-time homebuyer? Read my blog Buy a Home in Orange County
(also applies to buying a home in Riverside County) for some basic information.
Best OC Realtor for Veterans in Orange County serving cities of: Aliso Viejo, Anaheim, Anaheim Hills, Brea, Buena Park, Costa Mesa, Coto de Caza, Fountain Valley, Fullerton, Garden Grove, Huntington Beach, Irvine, La Habra, La Mirada, La Palma, Ladera Ranch, Laguna Beach, Laguna Hills, Laguna Woods, Lake Forest, Mission Viejo, Newport Beach, Orange, Placentia, Rancho Santa Margarita, Santa Ana, Tustin, Villa Park, Westminster, Yorba Linda
Best Corona Realtor for Veterans in Riverside County cities of: Chino, Chino Hills, Corona, Eastvale, Jurupa Valley, Lake Elsinore, Menifee, Mira Loma, Murrieta, Ontario, Rancho Cucamonga, Riverside, Upland
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