VA financing is just one of the benefits earned by our military service members.
With deployments ending, many of our service heroes will making Calif. their home & expanding your pool of buyers.
The key to working with VA buyers is presenting an offer properly to the listing agent so they can educate their sellers.
Get the Lowest Interest Rate, Fees, and Fastest Service
YouTube – Straight Talk Lending – Daniel Dobbs
Myths about VA Financing
Seller’s Costs
One of the more frequent objections to VA offers is the misconception of the costs to sellers (vs. more traditional types of financing).
When a buyer’s chosen lender is NOT charging an “origination fee” (virtually no lender does), the only seller’s cost is they must pay for a “Termite Report” and must be noted in the RPA Agreement.
All VA loans require a termite clearance to COE. It’s negotiable which party pays for actual repairs and the clearance report at COE.
Editor’s Note: VA (and FHA) buyers should never pay points (or any fees) for the loan transaction; as they can often use lender rebates to pay closing costs and then streamline refinance back to a market interest rate 7 months later.
Benefits of VA Financing
Property Types
VA is for owner occupied residences only, but can be used to purchase up to 4 units.
Quick Automated Loan Approval
To overcome seller’s objections to VA offers, buyers should submit accurate financial data to their lender in advance of the offer being presented. Once their loan is “DU approved” it virtually guarantees the loan funding.
Related Post: The Advantages of “DU” Loan Approvals
Shorter Waiting Periods after “Credit Events
If a VA buyer has had a short sale, foreclosure or bankruptcy, the wait time is just 2 years.
No Monthly Mortgage Insurance
VA loans have no monthly mortgage insurance premiums giving veterans more purchasing power.
For comparison: A $400k FHA/Fannie loan has a monthly premium (approx.) $300.
A VA buyer has (approx.) $25k more in home buying power without the monthly mortgage insurance premium.
Funding Fee
VA requires a minimum “funding fee” of 2.15% of the loan amount that can be paid in full or financed. For veterans receiving a VA disability benefit: the funding fee is waived or prorated!
In the future if the (now) VA homeowner wishes to streamline refinance the same home, pays only one half of a point (.5%) of the funding fee.
VA “DTI” Flexibility
A VA Buyer can have a “front end” debt to income ratio as high as 55%, with a high “residual income level” and/ or savings in the bank. For a household of 3 in California, the minimum residual income requirement is $990 per month.
NO Loan Limits:
In 2018 the confusing myriad of calculations of determining what loan amount a veteran could qualify was akin to “quantum physics”.
Now there are no loan limits!!!!!!
If a veteran makes a million bucks he can probably qualify for a 2 million dollar loan with zero down.
Also in 2020 any veteran who had been awarded the purple heart – can now have their VA Funding fee waived.
In Closing
In my 40+ year career I’ve found service members are the easiest buyers to work with, as they are always “squared away” on their paperwork and their association with other veterans provide a greater rate of referrals than a typical buyer.
Do you golf or know others who do?
Then please pass this along to them for our 12th annual tournament (“Tee it Up for Marines”) held in Oct 14 of 2022 at Camp Pendleton and Hosted by the City of Mission Viejo.
All proceeds go to: 1st Battalion 1st Marines and the tournament is hosted “on base” at the Marine Memorial Golf Course ; the 2021 tournament netted $25k for their families.
You can bring a foursome or we’ll partner you up with a Marine hero for the day.