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But the OP is trying to choose. All things being equal, a loan with a buyer who has a lot of cash to put down shows more promise of closing if a house does not appraise. So that puts the conventional loan right over the top.
I agree, but would the person still pay more than a home is worth. It would depend if it’s a seller or buyers market. They may want to negotiate it down either way.
I just bought a home with a VA loan with NO money down. We didn’t put money down, because we preferred to buy points off our mortgage and put in wood floors instead. Also need to add another bathroom. Either way we had the money.
Here’s what happened, we picked an inspector that our realtor recommended (from a list). The only issue was a bird’s nest that needed to be removed. Our va appraisal came in higher than what we offered and seller accepted, and said no fixes necessary. So far things have run smooth. No issue.
Go with whatever offer you want. Not sure why this board thinks people with VA loans are struggling or poor lol. My husband makes six figures. We are middle class. Maybe because we don’t need to put money down or don’t? I think it maybe generational to some degree.
We put in an offer on another place, but they chose more cash down/conventional.No big deal. Not sure what happened but they came back to us to see if we were still interested. We declined since we found our home, in the town we wanted initially.
I’d just make sure the person has a preapproval and some earnest money.
But this is where we disagree. It absolutely SHOULD matter.
We all suffered when lending was too loose and people were buying houses they couldn't afford. Regulations from post 2008 are being quickly rolled back.
I have a lot of my net worth leveraged in property and will be hurt in another crash. I will not contribute to irresponsible lending or buying more than one can afford. Sellers can (and should) screen offers to ensure they are solid and have a good chance of completing the transaction. If you are unwilling to put down enough money because you want to spend more on property improvements, that, to me, means you can't afford the house you want-- you WANT a house that includes these improvements but you are buying one without them. You don't have the cash to cover a decent DP AND whatever you are going to do to the place. Maybe in this scenario the buyer might look at a lower priced home where they can easily afford both.
Realtors regularly encourage clients to stretch their budgets. We see that here all over these threads. It makes sense for them to do this as a bigger sale means more commission. Sellers have a duty to make sure that the people who purchase their property are not stretching but have the means to do so.
Sellers should try to sell for the best and highest they can. I was a youngster in 2008, but The crash happened, because people were buying with adjustable rate mortgages or interest only. Which allowed them to buy homes well beyond their means with very low salaries. It created a bubble in housing prices.
It had nothing to do with people put nothing down. Youre far too concerned about things that are none of your business. The only people that should be concerned about what a buyer’s financial choices is the banks providing the loan.
Sellers should try to sell for the best and highest they can. I was a youngster in 2008, but The crash happened, because people were buying with adjustable rate mortgages or interest only. Which allowed them to buy homes well beyond their means with very low salaries. It created a bubble in housing prices.
It had nothing to do with people put nothing down. Youre far too concerned about things that are none of your business. The only people that should be concerned about what a buyer’s financial choices is the banks providing the loan.
Okay "youngster" you are not talking to some old retiree, but someone who started flipping houses in college and has quite a healthy portfolio/income as a result of savvy acquisitions and sales.
I see a no money down loan as a deadbeat buyer. Glad you feel differently. But I have largely avoided bad transactions over the years with my screening methods and I will continue to use them. I am not the only seller who has spoken up on this. Sorry that you are offended that people might view your offer negatively. Food for thought. Best of luck.
Okay "youngster" you are not talking to some old retiree, but someone who started flipping houses in college and has quite a healthy portfolio/income as a result of savvy acquisitions and sales.
I see a no money down loan as a deadbeat buyer. Glad you feel differently. But I have largely avoided bad transactions over the years with my screening methods and I will continue to use them. I am not the only seller who has spoken up on this. Sorry that you are offended that people might view your offer negatively. Food for thought. Best of luck.
What does you flipping houses in college have anything to do with what I posted? It’s obvious we are seeing the housing market from different generations. I don’t “feel” anything. Much of what you’re spouting is nonsense .You have avoided and probably missed out on sales too. I don’t feel offended that someone would view my offer negatively, it’s business. I am just pointing out your rhetoric is bizarre. You are way too invested in people’s loans and what they’re putting down. You then suggest they’re unqualified. I am just pointing out you’re wrong.
I know many people who choose not to see flips, because of all the horror stories out there and shoddy workmanship. With so much judgement towards your industry, you’d think you’d be less judgemental.
What does you flipping houses in college have anything to do with what I posted? It’s obvious we are seeing the housing market from different generations. I don’t “feel” anything. Much of what you’re spouting is nonsense .You have avoided and probably missed out on sales too. I don’t feel offended that someone would view my offer negatively, it’s business. I am just pointing out your rhetoric is bizarre. You are way too invested in people’s loans and what they’re putting down. You then suggest they’re unqualified. I am just pointing out you’re wrong.
I know many people who choose not to see flips, because of all the horror stories out there and shoddy workmanship. With so much judgement towards your industry, you’d think you’d be less judgemental.
The prejudice and superstition go far beyond nonsense.
The poster labels men and women who risk life and limb, sacrifice time and family time, in service to our nation as "deadbeats" if they attempt to utilize a successful and honorable minor benefit from their service.
And, this is not the first time, or the first thread.
What does you flipping houses in college have anything to do with what I posted? It’s obvious we are seeing the housing market from different generations. I don’t “feel” anything. Much of what you’re spouting is nonsense .You have avoided and probably missed out on sales too. I don’t feel offended that someone would view my offer negatively, it’s business. I am just pointing out your rhetoric is bizarre. You are way too invested in people’s loans and what they’re putting down. You then suggest they’re unqualified. I am just pointing out you’re wrong.
I know many people who choose not to see flips, because of all the horror stories out there and shoddy workmanship. With so much judgement towards your industry, you’d think you’d be less judgemental.
Obviously we have to agree to disagree. And I don't think you can appreciate the wider implications of using a zero down loan so I will explain.
When people overspend on a house with no down payment, not only more often than not do they foolishly pay mortgage insurance (biggest scam ever) but they put the bank entirely at risk if they can't make the mortgage. Miss a few payments and the bank 100% owns the house and has to recoup their investment, typically at a loss. Enough people do that and you have a crisis which devalues other homes and investments.
Its big picture--not just you feeling like you are some kind of big deal for being able to buy a house without putting anything down.
I see a buyer who is willing to do this and I see a foolish person who I don't want to deal with. Simple as that. I say no thank you. There is ALWAYS another offer as I have been smart about the markets in which I have invested. Have I said no to a zero down loan and had to wait a few days or even weeks for something better to come along? Yes of course but the wait has been short and something better always did.
I am not a flipper these days but thanks for disparaging the hard work we put in. It was a way to generate cash for bigger and better investments. Just pointing out that I had an eye on the market from my early adulthood and have been watching trends and human behavior. The zero down offer is a poor one in my experience. But it won't stop people from trying to make them. I know plenty of sellers who feel the way I do, but sadly not enough people pay attention to this. I absolutely judge people who are willing to go this route.
But this thread is not about a zero down offer. Its about a 5% down and a 20% offer. And the OP has not been back to comment.
The prejudice and superstition go far beyond nonsense.
The poster labels men and women who risk life and limb, sacrifice time and family time, in service to our nation as "deadbeats" if they attempt to utilize a successful and honorable minor benefit from their service.
And, this is not the first time, or the first thread.
Play your violin, Mike.
This is not about VA loans. You always want to beat that dead horse. Its about people making poor financial decisions. And realtors fluffing them up to do so.
(And pray explain, how does a loan vehicle get characterized as "honorable"? Is a conventional loan then "dishonorable?")
No question-- conventional. Its not even a contest.
VA loans are fraught with paperwork, stricter (and often absurd) appraisals that are well below market, and buyers who don't have the cash to make up the difference.
Yes, it used to be this way but they have gotten much easier to deal with. I know because I bought my house with a VA loan last August. My appraisal went fine, I was actually surprised it appraised as high as it did. Plus the loan is guaranteed by the VA where a conventional loan isn't. I know a lot of people are leery about a VA loan but time wise it worked out about the same from start to finish. You are NOT required to have PMI with a VA loan and even though I had to put $0 down, doesn't make me less motivated to make my payments on time and continue to make upgrades in order to increase the value of the house.
The approval rate is NOT 100% any more than any other mortgage loan. You have to have a credit score of at least 680 (if I remember correctly). A person with bad credit isn't going to get approved for a mortgage even with the VA. If I hadn't gotten the VA loan I would still be renting and paying more for a 2 bedroom condo each month than I am paying for my mortgage.
VA loans don't need a down payment from the buyer unless the buyer just wants to reduce his payment.
For the seller, you are much better off selling to the conventional loan buyer. That's because conventional loan lenders will not require extensive renovations before closing. VA loans are notoriously fussy to the point that the deals often fall through. This does not serve the veteran well. The veteran wants the property and the VA kills the deal with demands on the seller that the seller cannot deliver.
There is a national shortage of VA approved appraisers because the appraisers are abandoning VA loans. It's just too much hassle for the expense to the appraiser. I am a veteran and have 29 years experience in real estate. I recommend that veterans use USAA or Navy Federal as lenders, but go with conventional loans if they have a down payment. Only if they need no money down should they go with a VA loan and then they need to buy a perfect house. The dream of "buying the farm" may not be possible with a VA loan because of the hassle to fix every little thing before closing.
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