VA loans anyone?????? (PMI, agreement, closing, sellers)

[rettogo]

Has anyone personally worked with anyone having a VA loan? We thought we found a good loan officer, but he wasn't certified to do VA loans yet. I know Countrywide will do them but I was wondering if anyone else know anything about them, used them, etc. Thanks in advance.

[Gretchen B]

There are definite advantages to getting a VA loan if you're eligible to use one. 1) Zero down (so if you don't have much saved for a down payment, that's a great advantage); 2) Your credit score can be a little lower than with most conventional loans, and the debit to income ratios are a little higher with the VA (meaning it's easier to get approved for the loan; 3) Seller pays almost all the closing costs (so little out-of-pocket to get into a home).

As far as rates and fees, you still need to check around. All lenders have to make a profit. They do this either by charging a higher interest rate or more upfront fees. Usually if you find an extra low rate, then there are more fees involved; and vice versa. This is true with VA loans, too, except that the seller will pay those fees.

If you have some money to put down and cover closing costs, you might actually have a lower monthly payment with a convetional loan. It's best to find a loan officer you really like and have them run the numbers for you to see what's the best loan for you.

One slight disadvantage with using a VA loan: Most sellers are not as willing to negotiate on price if the buyer is going VA, since they'll be paying the closing costs and having to get their home inspected by VA. It also usually takes a little longer to close a VA loan.

[rettogo]

Originally Posted by Gretchen B

There are definite advantages to getting a VA loan if you're eligible to use one. 1) Zero down (so if you don't have much saved for a down payment, that's a great advantage); 2) Your credit score can be a little lower than with most conventional loans, and the debit to income ratios are a little higher with the VA (meaning it's easier to get approved for the loan; 3) Seller pays almost all the closing costs (so little out-of-pocket to get into a home).

As far as rates and fees, you still need to check around. All lenders have to make a profit. They do this either by charging a higher interest rate or more upfront fees. Usually if you find an extra low rate, then there are more fees involved; and vice versa. This is true with VA loans, too, except that the seller will pay those fees.

If you have some money to put down and cover closing costs, you might actually have a lower monthly payment with a convetional loan. It's best to find a loan officer you really like and have them run the numbers for you to see what's the best loan for you.

One slight disadvantage with using a VA loan: Most sellers are not as willing to negotiate on price if the buyer is going VA, since they'll be paying the closing costs and having to get their home inspected by VA. It also usually takes a little longer to close a VA loan.

Thanks. I was wondering what the pros/cons are of using a VA loan. So probably the most negative thing with getting a VA loan is negotiating?

[UseJeff]

Many brokers are set up to do VA and FHA loans both... you'll just want to call around and ask. Like Gretchen said, they are a touch more work and time, but you'll often get a better rate with less down payment if you go that direction. If you do find a broker who is licensed to do those loans, there are a couple benefits. First, they will be much less likely a fly by night brokerage, and should have some educated loan officers. In addition, they can shop all of their other lenders, and see if someone has a better loan for you than the VA.

[shellytc]

I do a lot of VA Loans. I am in a military town and many military will use their VA. In a military town, we don't usually have a problem getting a VA loan approved by the seller. Things you must think about.. you won't be able to do homes that are "as is". VA appraisers are trained to make sure the home inspects properly, and may request certain repairs be done prior to closing. That will make an as is sale not work. With a VA loan you have a funding fee instead of PMI that can be wrapped into your loan amount. Not very much, usually 1.5% for the first time you use your VA, well worth it not to pay high PMI.

If you would like more information let me know.

Shelly

[garth]

So guys . . . when does the use of a VA mortgage get surprised on the seller? I've never had a buyer use one, but I would imagine that it would be to the buyer's best interests to hide it since the seller is going to pay for things he normally doesn't have to pay for and deal with a bunch of govt headaches.

Have you ever had a seller refuse to pay for fees that are not customary or usual in the market? Or, have you had the seller raise the price on the home to cover the extra costs and time dictated by the VA's policy? I know that last one would be my option, especially if the buyer hid the fact from me during negotiations.

[Northwoods Voyager]

Here is a web site that has some very good points. I have had many buyers in the past use VA loans. No surprise to the sellers, either. This fact has always been made known right up front. And the seller can eliminate VA loans as acceptable means of financing when they list their property if they so desire.

//www.vamortgagecenter.com/

[WendyK]

Originally Posted by garth

So guys . . . when does the use of a VA mortgage get surprised on the seller? I've never had a buyer use one, but I would imagine that it would be to the buyer's best interests to hide it since the seller is going to pay for things he normally doesn't have to pay for and deal with a bunch of govt headaches.

Have you ever had a seller refuse to pay for fees that are not customary or usual in the market? Or, have you had the seller raise the price on the home to cover the extra costs and time dictated by the VA's policy? I know that last one would be my option, especially if the buyer hid the fact from me during negotiations.

It should be referenced on the offer as to what type of financing the buyer is approved for. Then the seller knows up front how to respond to the offer. Our purchase & sale agreement has boxes to check how the buyer is paying for the property. I would imagine most areas have a similar type of form.

[rettogo]

Well in response to someone raising the price of the home just because we are using our "earned" VA loan, I would go elsewhere. I understand we all have to live but seeing everything my family and I have endured during our time in the service, it's a benefit that was earned. I'm not insensitive to the fact that the seller will have to pay many of the fees but at the same time, most sellers are about the seller. I have no problem being about the buyer and using my VA loan doing it. At least I'm not deceiving anyone...not implying that anyone on this thread that are sellers would. However, let's not deny the fact that it happens time and time again.

[Gretchen B]

In this slow market, I think most sellers are just happy to have a buyer that wants their home. And, with more sellers offering to pay closing costs anyway, I don't think an educated seller would have any issues with taking a VA offer. The only ones that would probably have a problem would be the "as is" seller or someone with an older home that has outdated mechanical systems, etc, as Shelly mentioned earlier.

You always want to disclose the fact that you're going VA upfront. I did have one buyer that wanted to switch from conventional financing to VA 3 days into the contract. That did not go over well with my sellers. First off, he'd lowballed to begin with, and my sellers were already below their bottom dollar figure when they reluctantly accepted his offer, and then he dropped the "I want to switch to VA financing" on them. They were not happy campers!