5 VA Loan Myths Dispelled
Dismiss VA loan myths about the federally-backed, zero down loan program.
Myth #1 – VA purchase loans are not for short-sale or foreclosed real estate
Myth #2 – Surviving spouses don’t qualify for VA mortgages
Myth #3 – Military members deployed overseas can’t get a VA-guaranteed loan.
Myth #4 – All realtors are good VA home loan advisors
Myth #5 – VA loans take forever to close
Fact #1: VA home loans can be used to purchase foreclosed and short-sale with as little as no money down. VA-eligible borrowers may have an advantage over those who need up to 20% cash down to qualify for conventional loans. A VA appraiser is trained to certify value and safety and can spot red flags of distressed properties.
Fact #2: Veterans, active duty and certain surviving spouses are eligible for VA home loan benefits. Qualified surviving spouses may borrow up to $417,000 (more in high-cost counties) with no money down. And, surviving spouses are exempt from paying the VA funding fee.
Fact #3: Military members deployed overseas can sign a document called power of attorney or (POA) designating a spouse or someone else to act as on their behalf for a VA loan transaction. The POA grants permission for the attorney in fact to sign on behalf of the VA-eligible borrower. The service member must give intent to obtain a VA loan through an email, letter or other correspondence. Only a spouse can satisfy the occupancy rule (move in within 60 days of closing) in a deployed serviceperson’s stead. Otherwise, the borrower serving away from home will be granted an extension of up to 12 months to occupy the home.
Fact #4: A VA certification for real estate agents does not exist. Therefore, a real estate agent should not be used as a reliable source for VA loan information. Real estate agents who are not well-informed about VA loans can even unintentionally dissuade VA-eligible borrowers from choosing the program which may be best for them. A VA specialty lender, one whose majority product is VA-backed loans, can provide reliable VA loan facts.
Fact #5: If a lender is specialized in VA home loans, then closing can often happen within 30 days. The VA-approved lender is given flexibility to decide on its own whether a borrower is a satisfactory credit risk. Even a borrower with extenuating circumstances may close quickly.
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