Buying a house in today’s competitive market can be challenging for the everyday person. However, thanks to the US Department of Veterans Affairs, service members, veterans, and their spouses can rest easy in finding the right home for them.
In contrast to FHA loans and other conventional loans, VA loans are definitely the slowest program to apply for. Mortgage software, Ellie Mae’s origination report back in July 2020, shows that VA loans usually took around 49 days to close on average. Nevertheless, its numerous perks and benefits outweigh the few days of difference compared to other mortgage types.
What you need to know about VA loans
Misinformation around the internet isn’t uncommon, which is why you should do your own research to separate fact from fiction. If you don’t know what you’re getting into, you can face some costly consequences, especially when it comes to mortgage loans.
If you’re planning to apply for a VA loan, here are three things you should know:
1. VA members don’t automatically qualify for a VA loan
Just because you’re a veteran doesn’t mean that you automatically qualify for a VA loan. You will still need to apply for a mortgage, which requires you to present financial documents that prove your credibility as a borrower.
What people mean when they talk about a “guaranteed” VA loan is that the VA backs your potential loan. It’s a reminder that veterans can apply for a mortgage with particular benefits such as competitive mortgage rates, no required down payment, and other investment advantages.
2. You cannot apply for simultaneous VA loans
Since VA loans have many perks and benefits, some people assume that you can only use a VA loan for a one-time transaction. It’s true to some extent that you will become ineligible to a second VA loan while you currently have one. This ruling only applies to simultaneous loans, but you are eligible to apply for a second VA loan once you pay off your first one.
Keep in mind that there are several small differences once you use the VA loan program again. This can come in the form of a slightly higher closing cost. Still, it will generally be similar in terms of the application process.
3. VA loans don’t require you to pay a down payment
Since home prices in the past decade are continually increasing, many homebuyers in the market find it harder to make the right purchase. A typical way to lessen a property’s weight is to make higher down payments with lower monthly payments. This method helps future homeowners to reduce their overall expenses in the long-term. Thankfully, many eligible veterans purchase homes without paying a large down payment.
With VA loans, you don’t have to pay for the costly down payment to afford a home. Although you’re exempt from this rule, you still need to find a property that’s within your financial situation.
Since there’s no VA loan certification that real estate agents can apply for, you should find a reliable agency that knows your specific wants and needs. You may miss out on opportunities of being a VA-eligible borrower if you hire an under-informed real estate agent. It’s best to consult with agents who can guide you towards VA specialty lenders who will give you the best benefits for your mortgage contract.
Teaming up with the right agency is crucial in finding the best deals for securing your home. Our Frontline Financial loan experts can help you scout for the best mortgage rates in Salt Lake City. Get in touch with us today to see how we can help!