Meet Jason and Trish! They were able to purchase a home last year using their benefits of Jason being a US Veteran. It was such a privilege to get to work with the two of them and although Jason and I are family, it was a great bonding experience to be able to work together and get to know him and his fiancé better through their buying experience. I love the dynamic between the two of them and am so happy that they will be tying the knot this summer. After months of searching we found a cute home in San Gabriel that they now call home.
This year I am currently working with another well deserving veteran but he has also qualifies for a conventional loan. The question of which loan he should use has arose and also brought up some good points that other veterans should be aware about.
For starters let’s answer the question of “What is a VA loan?” VA stands for Veteran Affairs and it is a loan that allows not only veterans but also active duty, retired, prior military, and surviving spouses as long as they reach the required days of service.
Benefits of using a VA loan:
-Purchasing with a 0% down payment
-No mortgage insurance
Cons of using a VA loan:
-Potential 45 day escrow vs 30 day escrow
-Potentially higher interest rate
-Stricter appraisal guidelines
Some people have the preconceived idea that an offer that is presented with a VA loan is not as strong of an offer as one with a conventional loan. However, I have found this to not be the case. Like most situations in real estate, it all depends on a variety of things. If the house is in good condition and if rates do not vary significantly it might be better to go VA. Also, if you qualify for disability you do not have a funding fee. I have found a really great loan officer that can do a 30 day escrow and who’s interest rate is competitive with their conventional loan. It is in my current clients best interest to use this loan officer and go VA.
My best advise would be to shop around and have your loan officer(s) do a clear break down of what the cost of the mortgage would be with each loan they offer.
Questions to ask your loan officer(s):
If you do not have disability, how much will the funding fee be?
What are the different interest rates that you qualify for? ie: interest rate for VA loan vs Conventional
Can they close a VA loan in 30 days or less?
If you were to go conventional how much is the cost per month for mortgage insurance?
Ask for any additional information they have and ask for a side by side comparison of each loan option you qualify for.
In the end you want to get a loan officer that is willing to work with you to get you the best option possible for your personal finances. You also need a real estate agent that knows the competitive market we are in and how to best position your offer. I have my veterans write an offer letter introducing themselves to the seller which gives the offer a personal touch. I also look at homes that have sold in the past three months in the same neighborhood to figure out a good price to offer. And the best thing that I can do for my client is build a personal relationship with the listing agent to position our offer as best as we can. I can’t say enough how vital it is to have both a good realtor as well as a good loan officer in your corner to get you through a successful escrow.
Thanks for reading and as always I’m here to answer any questions you might have.