There are numerous, very common and widespread myths when it comes to VA loans. Many of those who would qualify for a VA mortgage are put back by all the rumors that tell them these mortgages are very hard to obtain and even harder to pay back ,refrain from getting such a mortgage. However, you must be aware that VA loans are actually among the best mortgage solutions, with repayment conditions that are very favorable.
In what follows, we would like to bust 5 of these myths and help you get a clearer picture of what VA lending means.
Top 5 VA Loan Myths
1) Military members who are in active duty or currently deployed overseas do not qualify for VA loans.
VA loans are not only for retired soldiers – those in active duty can also qualify. Soldiers who are currently deployed in an overseas area can file for a VA loan through their spouses or by designating someone else to act on their behalf with the help of a Power of Attorney. All you need to do if you are in such a situation is to confirm your intention to obtain a VA loan via an email or other type of correspondence.
2) Any realtor can help you obtain a VA loan.
The handling of VA loans requires special knowledge, and common realtors do not qualify as VA loan lenders. If you are looking for a VA loan officer, you can do a Google search of local lenders in your area. Most likely an internet search will also bring up reviews, good or bad, on the local lenders to help you sort through the best lender for you.
3) You need to have a perfect credit score to obtain a VA loan.
Not true at all. The credit score required by most VA lenders is around 620. If the perfect FICO score is 850 and average scores are around 760, being required to reach 620 is not severe at all.
4) You are required to make a huge down payment if you want to buy a home with a VA loan.
Not true at all. VA loans are actually among the very few loan structures that do not require any down payment whatsoever. (there are county limits, so ask your lender what your county limit is so ensure that you can purchase your new home with $0 down payment)
5) VA loans are not available for people who have had foreclosures or went bankrupt in the past.
In the case of conventional loans, there is a waiting period between the foreclosure or the bankruptcy and the application for a new loan. After a foreclosure, you need to wait for 7 years before you can apply for a loan and the waiting period after bankruptcy is 4 years (this is for a FannieMae conventional loan). In the case of VA loans, the waiting period is much shorter, but the applicant needs to prove that his or her financial situation has recovered since the bankruptcy or foreclosure suffered in the past. Assuming credit has been re-established a VA loan can be obtained within 2 years from a short sale, foreclosure or discharge of a bankruptcy.
VA loans are great financial solutions for veterans or active soldiers planning to settle down to get a home to call their own. Of course, there are requirements to meet and regulations to comply with, just like in the case of any type of loan, but the flexibility of these loans is unparalleled, offering a great opportunity for our soldiers to obtain their dream home. The greatest benefit is no monthly mortgage insurance! There is nothing better than little to no money down, with NO monthly mortgage insurance!!