Using my VA Loan, the Pros and Cons.

[G.Gordon]

Frequent poster in Healthcare Reform and Senior Insurance forums.

I'm moving closer to the office. I've bought two homes before and it seems that every time they talk me out of using my VA. Why? Any idea?

I can't remember. Last purchase was over a decade ago and I've had a few thousand conversations since then.

 

[Josh]

One of the things that's hugely different about the mortgage world than the insurance is they can literally change the interest rate and change their compensation. As ridiculous as this might sound, best thing to do is to take a look at multiple offers. In general the advantage to using a VA program is basically no money down and no mortgage insurance (VA guarantees the loan). If it's VA vs FHA that would be why. If you are going to put money down and go conventional vs VA then that's a different comparison as well. If you'd like I can send you a guy to talk to that has a ton of experience that I'm sure could clear it up, but of course, he also does have his biases. Every time you talk to a mortgage broker it's not just a matter of what company, it's the terms of the whole deal - not really as much transparency as a consumer might like.

 

[G.Gordon]

I'm engaging two sources.

1. One is a drinking buddy/friend from the local pub. She has many years experience, but current on vacation.

2. Then there is my loan officer at my Federal Credit union. I have great experience with them, have done signature loans, secured loans, etc.

I was just looking for insight on why a loan officer/mortgage broker might steer someone away from VA as it seems has happened to me 2x.

 

[Dave020]

Several broker friends I knew some years ago told me that they make very little on VA home loans as opposed to more conventional loan programs.

I used VA to buy my house in 2013. I ended up going with a VA loan specialty company (ifreedom direct) and they did a great job for me. I talked to several brokers first but they didn't seem much interested or up to speed on the VA process.

VA loans are a bit different in that you have to pay a 3% VA fee (rolled into your loan), you can get 100% with no PMI, and they require you escrow your property taxes and homeowners insurance into the loan payment. I find that very convenient.

Another difference is that the VA picks who inspects your house and such. Neither the lender nor the broker can pick those people, has to be designated by VA.

 

[pcbinsurance]

Are you in Missouri G. Gordon? I can hook you up with someone that will assist you. I've used my VA Loan and I think it's a great way to go.

 

[G.Gordon]

I'm just outside of Kansas City.

 

[bluediamond]

G I have had two VA loans in the past 40 years and had no problem, but I do believe banks tend to shy away because of low commission's, I had one of the largest banks in the south tell me two years ago they would not do them only to find out after I went to a VA mortgage company they did. The VA fee is waived if you have a service connected disability and have paper's to prove it. As Dave said they will assign the appraiser and the one I had showed no mercy on her personal preference's, in fact she even put in the appraisal it was personal feelings, put in an official complaint with VA but lost.

Oh, might add that you have to live in the VA loaned home and are not suppose to rent it out. No one has ever checked though.

 

[G.Gordon]

Thanks for the responses. So far, the CU and the bank seem happy to do a VA. Times must have changed.

I did get my pre-approval from both lenders that selling my current home is not a requirement for approval.

 

[bluediamond]

So G, how is all that going? I know you didn't have to sell your current home, but in the paperwork for the VA you sign you will agree you will be living in the home you are purchasing with the VA loan. I refinance a year and half ago and used VA and it was a requirement. But no one has ever checked to see if I live here (as far as I know) and check to see if it's rented to someone else.

 

[G.Gordon]

Just about to contract a buyer for the old house. New home inspected and things are underway for a May 1st close.