When Clay made the decision to retire from the Army, we had every intention of retiring in West Virginia. We had property – 64 acres of property – that was simply beautiful. However, God had other plans. When God made it clear to us that we were supposed to head to Tennessee for retirement, we began to discuss living arrangements. We considered renting, but we had rented for years. I was tired of renting and wanted a place of my own. My husband was tired of moving. He averaged just over 2 years per duty assignment and was ready to call a place a forever home. As luck would have it, I became acquainted with a fellow blogger who lived in the area we were looking to buy a home and, by the way, her husband is a realtor! I said it was luck, but my husband says otherwise. He doesn’t believe in luck; he believes in Grace.
Road trip! I made the trip down to Tennessee with my mom and the boys. We literally took half a day to look at houses for sale. I was heading to South Korea to spend a couple of weeks with Clay and time was no friend of mine. I sent Clay some pictures of the homes I liked and we put in an offer on one. The bidding went back and forth. We put in an offer and they countered. This went on for about a week and Clay was growing frustrated by the minute. He kept telling me that something didn’t feel right about this house. As the weekend approached, another buyer came onto the scene. The bidding war was about to begin and my husband wanted no part of it. The other buyers put in an offer and the owners wanted to take the weekend to process the offer. When God closes one door, He opens another. This was our way out so we bid on a different house. Our offer for that house was accepted right away!
I got ahead of myself. Prior to all the bidding and looking for houses and whatnot, we were introduced to a VA loan officer. This gentleman explained the VA home loan process, informed us how much we qualified for and walked us through the process.
Borrowing from lenders can be confusing and difficult to know where to start or if you’re receiving the best offer. For most military borrowers, VA loans are going to offer the best lending program available on the market. You’ll be more easily approved and get the best interest rate of any other loan you likely qualify for. They are flexible and require no down payment. They are also reusable, which means that once you have used it once and paid off your loan, you can use it again and again. Any time you PCS or just want to upgrade to a newer house, you have the option of a VA loan, provided you remain in good credit standing with them. All of this has helped make military members and their families homeowners for many generations.
Here are 5 things about VA loans that will help you in your journey to applying.
- The process can be tedious. You should have a good understanding of the VA loan programs before trying to fill out any paperwork. You can find information from the VA website that will help determine if you are eligible before applying. The website also provides information you need prior to getting starting and how to appeal any decisions made. Use this information to your advantage and make sure you understand everything about your loan. You may also be able to get legal and financial advice from JAG or other programs at your base, within your unit, or through your local VA office if you are no longer active duty. The American Legion, VFW and other veteran organizations can help as well.
- They are available even if your credit history isn’t grand. You can apply for a VA loan and be approved even if you have had foreclosure or bankruptcy in the past or other credit blemishes. This gives an option to veterans for honorably serving who haven’t looked or were skeptical about other lenders, or possibly even denied for a home loan in the past. It’s a “perk” of military service and can help you with building or repairing credit, as well as just help military families own their own homes.
- They are guaranteed by the government. While VA loans are not actually handed out by the VA, they guarantee a percentage of the loan, making other companies feel more secure in lending to you. This will also help you secure better payment plans and interest rates. In a way, it’s like having the VA co-sign for you. They’re essentially telling the lender, “Hey, we vouch for this person.”
- Exclusions apply. If you are trying to apply for a VA loan with anyone who isn’t a former service member or your spouse, you will have to pay the down payment. There are some VA lenders who will not even consider those types of loans. There are also limits on the types of homes and properties you can purchase with a VA loan. You won’t get approved for a working farm, a business, or a fixer-upper in most cases. VA loans are not for helping you start a business and you also can’t use it for homes you don’t intend to live in yourself. It’s designed for move-in ready single family homes, condos, or modular housing.
- There is a mandatory fee for receiving a VA loan. You can have this fee rolled into your loan repayment or if you were injured in the service you can file to have the fee waived entirely. There’s no mortgage insurance so this is like a fee in lieu of that insurance. The VA Funding Fee is usually around 2% of your loan and it’s used to help keep the VA program alive to help other service members and veterans get into homes just like you. It is usually waived for people with service-related injuries and disabilities.
These are just a few basic things to know about VA loans. As with any loan, there are many other things that you need to know and each individual case is different. The information you need and the details of your loan can vary. Just because Jack down the road had a VA loan horror story doesn’t mean you’re about to live out that story. My husband and I both heard the horror stories and our process, albeit bumpy at times, went without a hitch. While demand for VA loans has increased significantly in recent years, most members of the military, veterans and reservists, as well as their spouses can qualify for a VA loan.
Try not to be discouraged if you are denied. Expect to give more information than is required to complete your application process. We submitted everything in accordance with the website, yet, they asked for more. It’s easy to get stressed out over the process and well worth it in the long run. Read the fine print and keep up to date on any changes to policy and you will have no problems acquiring the home you desire.
One last thing, start working out your hands and wrist. You will sign and/or initial a lot of paperwork. 😉