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My husband and I have been working with a mortgage officer who was recommended to us by our real estate agent. This is our first time to go through the home buying process, and we have been married for about a year.
My husband is VA loan eligible, and that is the reason we were referred to this particular loan officer (because he apparently has experience with VA loans). We met with him about a month ago, and he talked to us about the benefits of VA loans. He asked us to get some paper work together (my husband's DD-214, past W-2 forms, bank account records, and pay stubs).
We did that, and then we got a call from him, saying that we had been approved for a FHA loan! We asked why FHA and not VA????? He said, "Oh, I didn't know you were eligible for VA." Obviously, we were taken aback since that was why we went to see him in the first place. . .for the VA loan! AND we had had a whole conversation about the benefits of VA loans. FHA was never mentioned once.
So, we feel a little suspicious about this. At best, we feel like we were not listened to or that he did not make notes on our file in an accurate manner.
At worst, we feel like maybe we are being taken advantage of since we are both new to this. Will the loan officer make more money or something if we take the FHA over the VA?
He said the FHA would cost us about $4 more per month than the VA. Is that true?? Four dollars per month isn't much (about $1500 over the course of a 30 year loan, I calculate), but shouldn't he be trying to get us the best (most affordable) option?
We haven't signed any papers or anything with this guy, so we may just go to another lender. BUT this guy has already done the credit searches which I believe are "hard hits," and maybe these have lowered our credit scores??
With FHA he can make slightly more than the VA.
Not a huge difference to stir you that way...usually 0.25-.375 in points.
So if your loan amount is 100k he would make 250-375 more with the FHA.
This also depends on the access of lenders that he has.....some lenders have the same pricing for VA/FHA
If this is your first time using VA ...than the benefit will better with VA than FHA. (especially if you're not putting any money down)
also FHA & VA dont have a credit score requirement...so if the lender is pulling your scores within 30days it only counts as 1 credit pull.
Either way...it drops around 4-5 points which isnt going to affect your fha/va loan
I dont know if it's going to be a 4 dollar difference as FHA has Mortgage insurance payments...and VA doesnt.
That maybe a huge difference......
Some loan officers want to do VA financing as it can be hard to approve the property.
With VA the borrower AND the subject property need to be approved.
With FHA....the bororwer is approved...and they dont have as many strict guidelines for the property as the VA does
Thanks for your quick replies! This is my first time posting, and I really appreciate your advice.
So, do you think the loan officer just "forgot" that we had had a whole conversation about VA loans and had never even mentioned FHA loans? Would you stay with him or go elsewhere?
This is our first time to use a VA loan. We would like to go O-down. It is a little sooner than we had planned to purchase a home, but it seems like such a good time to buy, and we are soooo desperately cramped in our current place.
Most realtors, builders, sellers, appraisers, and loan officers DO NOT like doing VA loans.
FHA requires a down payment (2.25%)
You can always shop around...and still tell this lender that you still want to go VA.
Quote:
Originally Posted by ky chica
Thanks for your quick replies! This is my first time posting, and I really appreciate your advice.
So, do you think the loan officer just "forgot" that we had had a whole conversation about VA loans and had never even mentioned FHA loans? Would you stay with him or go elsewhere?
This is our first time to use a VA loan. We would like to go O-down. It is a little sooner than we had planned to purchase a home, but it seems like such a good time to buy, and we are soooo desperately cramped in our current place.
I told him on the phone yesterday that if we didn't get a VA loan, we would just wait to buy a home later. (I guess that was my way of saying, "I won't be pressured into your FHA loan if that isn't the best for me.") That's when he said, "But it will only make a $4 difference per month. . ."
Our price range is up to $150,000. plenty for us. very committed to living within our means.
what state are you in?
what was the rate he was offering for FHA and/or VA?
Quote:
Originally Posted by ky chica
I told him on the phone yesterday that if we didn't get a VA loan, we would just wait to buy a home later. (I guess that was my way of saying, "I won't be pressured into your FHA loan if that isn't the best for me.") That's when he said, "But it will only make a $4 difference per month. . ."
Our price range is up to $150,000. plenty for us. very committed to living within our means.
We are in KY (Louisville), but we are looking to buy across the river in Southern Indiana. When we first talked to him about VA about a month ago, he quoted us the rate of 6.375% for VA. I have been watching the VA rates online since then and I believe they have gone down. He hasn't quoted us any rates for FHA. We have a meeting with him on Tuesday.
Actually rates have gone WAY UP.
1 month ago you could've easily gotten less than 6% for VA/FHA.
Remember that VA loans can take longer to process than any other loan.
Make sure to have turned in your documents such as w-2's, tax returns, bank statements, LES/paystubs etc...I would do that ASAP to any lender you are working with. Ask your lender what you will need to do to be ready to lock-in a rate.
Quote:
Originally Posted by ky chica
We are in KY (Louisville), but we are looking to buy across the river in Southern Indiana. When we first talked to him about VA about a month ago, he quoted us the rate of 6.375% for VA. I have been watching the VA rates online since then and I believe they have gone down. He hasn't quoted us any rates for FHA. We have a meeting with him on Tuesday.
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