In fact, there are many misconceptions about getting a VA loan. Such as:
- That a VA loan is harder to get
- The loan program is inflexible
- Not knowing that senior veterans are eligible
Let’s look at these myths plus 4 more and set the record straight.
#1-Does the Military Help with Buying A House?
To be clear, the military itself does not help you buy a home. However, it does have the VA loan program which assists active military and veterans to purchase a home.
#2-What Should You Do Before You Buy A House? (HUGE misconception!)
These days, nobody stays in a house forever. Even though you’re buying a new home, you want to approach this as a long game.
That means also thinking about your exit strategy with the house. Ask yourself these questions:
- How long do you plan to stay in the home?
- Are you planning to start a family?
- Do you need a nice yard for your dogs or for kids?
- If you hate mowing a lawn, would a condo be a better investment?
Don’t rush into buying a home. Give thoughtful consideration before entering the market. Remember, homebuying is a long-term investment.
If you have a military assignment that will last only 3-4 years, buying a home does not make sense. Choose instead to live below your basic housing allowance. Save the difference for a nice down payment when the time is right.
Once you’re clear on your goals for buying a home, there are several more misconceptions to clear out before you’re really ready to dive into the market.
#3-Get A Realtor or “I Got This”?
The legality of buying a home is enormous. Work with a professional that can guide and assist you along the way.
Should obstacles arise, and they usually do, having a pro navigate the real estate landscape will make the experience easier.
#4-Military Home Buyers and Closing Costs: Lose This Misconception
The bottom line is, the buyer is responsible for closing costs. That said, a military home buyer is limited on the types of closing costs paid.
These closing fees are not allowed for a military homebuyer.
- Tax Service
So, if the buyer doesn’t pay these other fees, who does? The seller, the real estate agent, and the lender can all offset these costs.
While the seller and the agent may chip in on the amount, lenders can offer a credit on the interest rate to the buyer.
The lender can also charge a 1% origination fee to the buyer, which is an allowable fee, in lieu of charging the non-allowed fees.
#5-Understand the VA Funding Fee
Even so, there are still loan costs associated with the military’s loan program such as the VA funding fee.
The funding fee is 2.3% of the amount borrowed. For those that have used the program before, the fee is 3.6%. However, the fee can be reduced if the down payment is at least 5%.
The funding fee is an upfront expense which can be rolled into the mortgage loan. This, of course, increases monthly payments as well as the overall loan amount. The only time the fee is waived is if the veteran has a disability rating of 10% or more.
The Department of Veterans Affairs receives this fee which helps to cover any losses, as well as keep the loan guaranty program running for years to come.
#6-Military VA Appraisal: Substitute for A Home Inspection?
The appraisal is to protect the lender, not the buyer! A home inspection, which the buyer pays for, protects the buyer.
#7-Can Senior Veterans Take Advantage of VA Home Loans?
#8-Are Military Home Buyers Only Eligible Once for a VA Loan?
And, it’s possible to have two VA loans at the same time.
#9-Understanding That Your Home is an Investment
Besides building equity, your mortgage interest is tax deductible, and that can help financially.
Additionally, home values are appreciating rapidly in parts of the country, certainly here in Staunton, Waynesboro, and Augusta County.
Even if you stay in your home for 5 years, you can see a nice appreciation on your investment which will help you leapfrog into a bigger home.
Here at Lilly Title & Settlement, when you’re ready to purchase a home, we can help perform the title search and set you up with title insurance to help protect your home for as long as you own it.
Additionally, let us help you with closing on your home. Our knowledgeable staff can assist you, your agent, and your lender through the real estate closing process. Learn more about us here: https://www.lillytitle.com.