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Myths and Truths about VA Loans and VA Home Buying
“I can only get a VA loan directly through VA.”
This is not how a VA loan works; the VA only backs your loan. This means that you can use any lender that offers the VA loan program, which most lenders do. This allows you to shop for the best rates and terms. You will want a lender that specializes in VA lending. Your real estate agent will be able to direct you to the best VA lender in your local market.
“I can only use my VA Loan once.”
This is 100% false. You can use your VA Entitlement multiple times, and you may use it for more than one house at a time. VA Loan limits vary across the country, and there is an algorithm the lender uses to determine how much of a house you can purchase with your remaining entitlement when you already own a home with a VA Loan.
“Everyone pays a VA Funding fee.”
Did you know that if you are retired and have 100% rating for your VA disability the VA Funding fee is waived? Typically, the funding fee may be anywhere from 1% and up! This means big savings for our VA clients with 100% disability.
“The VA Loan process is too long.”
While it may be true for out of state lenders and more national lenders, it is not true for our local trusted lending partners. 30 days is now the average closing time our clients have when using our trusted sources.
“The seller will pay all my fees.”
While this is false, it can be true in certain cases. The VA does not allow the buyer to pay for their pest inspection which is generally $75. We can negotiate seller paid closing costs to keep the out-of-pocket expenses very low for our buyer clients. Did you know that if you have seller credits that exceed your actual costs to purchase the home that you can apply the remaining seller credit balance to your debt? If you have $5,000 in seller paid CC and only use $4,000, with lenders approval, you can have that extra $1,000 paid to a credit card company at closing.
“I must use certain lenders with their real estate agents to get cash back at closing.”
This is not true. It is more of a twist of how things really work where lenders try to get you to use a very profitable referral service. You should choose your own agent based on referrals from friends or reviews online. A great agent will negotiate for you to get the best deal. An agent with these companies are required to give most of their commissions back to a 3rd party company. This means the agent for these companies make very little money and due to that, you’ll get very little service. This also means that you may pay more for your home or other hidden costs that go along with this process.
We hope this helps set things straight about VA home loans.
Maison Realty Group is in Downtown Southern Pines and their agents specialize in the VA home buying process.
For more information or answers to any question not addressed, please call Amy at 910-405-7795.
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Myth #1“I can only get a VA loan directly through VA.” This is not how a VA loan works; the VA