by Michael L. Baker, Sr. Mortgage Loan Officer at Affinity Mortgage.
First off let me say, if you are a Veteran or on Active Duty or in the Reserves… Thank you and God Bless you! I mean that from the bottom of my heart. I have worked with a lot of Veterans and many Active Duty Personnel over the years. You all are amazing people. You give of yourselves to protect the rights and freedoms of the rest of us, and I am in awe of all you do and how you do it.
To your families, Thank you and God Bless you! Let’s never forget that for every Veteran or Soldier out there, there is always a mom and/or dad, a spouse, children, brothers, sisters, friends and so many more behind the scenes that support these men and woman and do so humbly and with such grace and strength. So again I say, thank you!
Okay… so you are interested in finding out more about the VA Loan and the process involved in buying a home? Well let’s start today by covering some of the most common misconceptions surrounding VA Loans.
5 Common Misconceptions About VA Loans
1. The VA sets interest rates on VA loans, right? This actually couldn’t be further from the truth. The VA doesn’t actually lend any money. They simply write and interpret the guidelines for getting a VA loan and they guarantee your loan up to 25% to the lender that actually originates your loan. This means that the VA does NOT set interest rates.
2. All VA Lenders are created equal! This is another misconception that people have with the VA loan is in assuming that all lenders are built equally, that all lenders offer all eligible Veterans and AD’s the same interest rate and that all lenders have the same guidelines when it comes to underwriting VA loans. This couldn’t be further from the truth. Banks and Mortgage Lenders set interest rates based on their profit margins. And when it comes to guidelines, yes the VA sets the standard guidelines, but then each Bank or Mortgage Lender has what are called “Lender Overlays” on top of all the VA’s standard guidelines. This means that while the VA may not care how much your debt to income ratio is, individual banks and mortgage lenders do. Many banks will cap their Veteran’s debt to income ratio at 45% where others will go up to 60% and beyond. This can be EXTREMELY helpful to know in the case of say a Veteran turned small business owner that now is self-employed with lots of business write-offs.
3. VA loans are hard to get closed and my Real Estate Agent said no one will accept my offer with a VA loan! First off if your Real Estate Agent, or anyone for that matter, says you shouldn’t used your VA earned benefit from your years of service to our country turn and high-tail it out of there and find yourself a new Real Estate Agent. And if you are looking for a Real Estate Agent that is well versed in VA loans, just ask me, I’ll get you to a really good Agent that understands VA loans. Secondly, if a seller didn’t accept your offer because you wanted to use your VA benefits than I’ll bet you there are a 100 other reasons you wouldn’t want to buy that house after you had an inspector poke around in it. Your a Veteran, you served your country, you earned the right to use, what I consider to be, the best loan on the planet. Don’t let anyone else dictate what type of loan you use to purchase your house, when a VA loan 9 times out of 10 is going to be the most beneficial loan for you to use. But here is the deal, can VA loans be tough? Well that’s a trick questions, let me explain. VA loans ARE tough, if you are an inexperienced lender just trying your hand at your first VA Loan. For someone like me with 10 years of experience in the finance industry, and the last 7 years working the VA niche loan market, backed by a company with 16 years of experience, they are not. We have streamlined the process and made it a snap for you to use your VA benefit to purchase your house.
4. I heard that VA loans take months to close. Read the last part of item number 3 above. For an inexperienced loan officer or a mortgage lender that only “dabbles” in VA loans, I bet that is absolutely the case. Most of my VA loans are closing in 3-4 weeks right now. So you can confidently write up a loan offer for the purchase to close in 30 days.
5. I’ve got 5, 10, or maybe even 20% down, so I don’t need a 0% down VA loan! Hold on there cowboy (or cowgirl)! I cannot begin to count the number of times that I have had a Vet start off this way, only to see that after I structure the VA loan for them, that they can still put that much down, get a lower interest rate and lower closing costs and close just as quickly! Here’s the deal, lending these days can be very “round peg” “round hole”. Meaning, loan officers are so quick to just shove Customer’s A, B and C into the same loan products because “that’ just what we do” or “those are just the easiest loans to do”. Please don’t get caught up on that kind of lending. You need a lender that thinks outside the box. You need a lender willing to go to bat for you to get you in the VERY best loan that you deserve. Don’t let your lender take the easy road, or be lazy.
I hope today’s post sheds the light on these 5 common misconceptions. If you want to find out if using your VA benefit is in your best interest I’d be happy to spend a quick 15 minute consultation phone call or coffee break with you to find out. It would be my honor. Again, Thank You and God bless!
PS, If it sounds like I can help you, please contact me directly through Linked In, email me at email@example.com or call/text me at 913-735-5363. If you’re not yet ready for a conversation, but you’d like to learn more about me and how I can help you or about the mortgage process in general, including great blog posts to send out to your clients, check out my website at http://www.michaelbakerhomeloans.com.