The VA Loan – Yes, You Should Buy Right Now!

Do you know why it is so hard to find the right information on getting a loan as a veteran (the term veteran includes anyone who has at any time been in the military and has not gotten a dishonorable discharge. so current and former military folks listen up)? I’ll tell you. Our Loan (the VA Loan) is so good that there are thousands of organizations trying to proselytize their ability to service you 😉 What does that mean? Well, let’s break this down into very digestible sections. If comprehending and words aren’t your thing, fast-forward to the bottom of the page and I’ll wrap this shit up for you EASY PEASY, but please understand some other folks in the greatest military on earth like to read shit before they sign off on it. Fool me once…

What is the VA loan?

I’m not going to jump into the history of the loan and when it was created, but I will say it was created to aid a trustworthy and deserving class of Americans to afford homes after WWII. The VA loan is without question the most valuable asset in the veteran’s arsenal. Here are some quick facts about your VA loan:

• Eligibility: The VA loan is available to eligible veterans, active-duty military personnel, and certain members of the National Guard and Reserves.
• No Down Payment: One of the most significant benefits of a VA loan is that it does not require a down payment, unlike many other mortgage options. This makes homeownership more accessible to qualified veterans and service members.
• No Private Mortgage Insurance: Unlike conventional and FHA loans, VA loans do not require the borrower to pay private mortgage insurance (PMI), potentially saving borrowers hundreds of dollars per month.
• Funding Fee: VA loans usually include a funding fee. This fee helps offset the loan program’s cost to taxpayers. However, certain service members and veterans may not have to pay this fee.
• Lower Interest Rates: VA loans typically offer lower interest rates than other types of mortgages, which can lead to significant savings over the loan’s lifetime.
• Limitations on Closing Costs: The VA restricts the amount of closing costs that veterans and service members have to pay.
• Assumable Mortgages: VA loans are assumable, meaning a home purchased with a VA loan can be sold to another party along with the current loan terms and interest rate.
• Variety of Loan Types: VA loans can be used to buy a house, condominium, or multi-family property, build a home, improve a home by installing energy-related features, or refinance an existing home loan.
• Multiple Use: The benefit of a VA loan is reusable. Once you have paid off your VA loan, you can use the benefit again.
• Loan Limits: There are limits to how much you can borrow without making a down payment, but these limits are quite high in most parts of the country.
• Loan Prepayment: There’s no penalty for paying off a VA loan early.
• Financial Counseling: The VA offers financial counseling to borrowers who are in financial trouble or at risk of defaulting on their loans.
• No Maximum Debt-to-Income Ratio: The VA doesn’t set a maximum debt-to-income (DTI) ratio, but lenders generally look for a DTI ratio of 41% or lower.
• Residual Income Requirement: The VA has a unique requirement where borrowers must have a certain amount of income left over each month after all major expenses.
• COE Requirement: Before you can apply for a VA loan, you must first obtain a Certificate of Eligibility (COE) from the VA, which verifies to lenders that you meet the requirements for the VA loan benefit.

In summary: you have access to an incredibly flexible and lucrative loan.

The quick down and dirty on loans

A loan is essentially an assessment from a bank. The bank is going to assess your reliability, dependability, and current debt-to-income ratio to assess your current status to see if you will be able to pay your loan off. They achieve a lot of this information from your credit score which is why you should have a credit card if you don’t already. Once the bank has assessed if you can handle a loan payment they will either approve you or deny you. In today’s world, this process is really quick, and if you’ve been doing your due diligence paying off your credit card and likely a car loan you should be ready for approval on a home loan. Banks want to approve people for loans because they are generally going to make the price of the home double the price in interest payments over a 30-year fixed-rate loan. Don’t know what a 30-year fixed-rate loan is? or what those terms mean? Here is another list of some lingo you should know when purchasing a home:

• Mortgage: This is a loan that you take out to buy a home. The property itself acts as collateral for the loan.
• Principal: The principal is the actual amount of money you borrow to buy a home.
• Interest: This is the cost of borrowing money, which is typically expressed as a percentage of the loan.
• Fixed-rate Mortgage: This type of mortgage has an interest rate that stays the same throughout the term of the loan.
• Adjustable-rate Mortgage (ARM): With this type of mortgage, the interest rate may change after a set number of years. After this initial period, the rate will adjust at a pre-determined frequency.
• Down Payment: This is the upfront money you pay when purchasing a home. It’s generally expressed as a percentage of the home’s total price.
• Pre-Approval: A process where a lender evaluates your financial health and determines how much you can borrow before you apply for a loan.
• Closing Costs: These are fees and expenses you pay when you close on your house, beyond the down payment. They can include things like appraisal fees, title insurance fees, and escrow costs.
• Loan-to-Value Ratio (LTV): This is a ratio that compares the amount of your loan to the value of the home. Lenders use this ratio to assess risk.
• Private Mortgage Insurance (PMI): Insurance that a borrower might be required to buy if their down payment is less than 20 percent of the home’s purchase price.
• Appraisal: A professional evaluation of a property’s market value.
• Credit Score: A numerical score that represents a person’s creditworthiness. Lenders use this score to determine who qualifies for a loan, at what interest rate, and what credit limits.
• Escrow: An account held by a third party on behalf of two parties in a transaction. It’s often used in home purchases to hold the buyer’s deposit until the deal is completed.
• Points: Also known as “discount points,” this is a type of prepaid interest that borrowers can purchase at closing to lower their mortgage interest rate.
• Amortization: The process of gradually reducing a debt through installment payments of principal and interest over a set period.

Most people do not know how flexible the VA Loan can be.

The VA loan has a plethora of options to check out. Take a peek at these options for your VA Loan:

1. VA Jumbo Loan – This loan will cover the purchase of a home that is over the regular spending limit of the VA loan of $726,200
2. VA Condo Loan – The VA condo loan is only available for approved VA condominiums. Seek approval HERE
3. Manufactured Homes, Lots, and Construction – The VA will cover a prefabbed home if it is affixed to the ground. They will also cover the purchase of a lot if there is a guarantee it will be used to construct a home on it. Construction loans can be utilized to cover the price of building a home as long as the lender can handle it. This can cover the cost of land purchase as well if the lender can.
4. Renovation – This loan can be used to renovate the home in a way that improves accessibility and quality of living. improvements must be affixed to the property. The renovation costs will be added to the loan amount and paid through the regular service of the loan.
5. Energy-Efficient Mortgage – The EEM can be used to put in place energy-saving renovations on your home like solar panels or new windows. The savings must cover the cost of your monthly mortgage payment.
6. Interest rate reduction Refinance Loan (IRRRL) – You can refinance through the VA if the interest rate can be dropped 1% (generally). closing costs are included in the loan.
7. Cash Out Refinance – A Cash Out’s objective is to withdraw equity from your home. If your $100k home appreciates $20k in value you can withdraw that $20k through a refinance. However, you’d be paying monthly on the adjusted rate of the home. $120k

The “Why Not”

1. WHY PAY FOR A HOUSE IF I CAN RENT: Considering you have to put down 0 dollars to be able to purchase a whole fucking house that you can then rent for more money than your mortgage, you’d have to be so concussed you might still be on a mortar range right now. This is a MAJOR stepping stone in life. Do it early and be smart about the location… but remember there is NEVER a better time to buy than right now with a VA loan. Don’t wait, start your real estate business today. You will make more money than you’re paying (more than your mortgage is how we should say that) on a rental property, especially if your home is near base (think less than a 20-minute drive).
2. WHAT ABOUT THE RATES!? THEYRE HIGH AND SHIT: Yes, the rates are high… but what is everyone saying? They may never come down. I don’t believe any of that, but even if I did, I would buy it. Why? because if they aren’t coming down then they’re at the lowest rate they’ll ever be right now. Make sense? Otherwise branching from my logic, things will eventually cool down in the market and you will have already bought a home that is renting for more than your mortgage payment, so you’re making money, but not only that. you WILL be able to refinance with a VA loan as soon as the rates go down .5%-1% which, in my own humble opinion, is going to happen without question. Why is a refinance good? Click HERE to find out more about the potential benis in a refi (sounds like a good breakfast. “Benis in a Refi”). Needless to say, you’ll be making money and preparing yourself for life outside Uncle Sam’s massive pockets.
3. BUT IF I BUY SOMETHING SO QUICK WHAT IF I MISS A GREAT DEAL: Follow my logic on this one. The great deal is the VA loan, and every second you don’t use it you waste it. Why? because every second you don’t have an asset in your back pocket you’re falling behind the vet who does, and you know they’ll be telling you all about how smart they are and that shit’s a pain. Why else? because the perfect house will ALWAYS elude you. The real perfect house is the one that fits your current needs and you can get it ASAP.
4. I DON’T HAVE THE MONEY TO PAY FOR A MORTGAGE EVERY MONTH: Can’t pay for a mortgage? Don’t. move a friend in to help with the payment. Cordon off part of the house and make it an Airbnb. There are plenty of options to chip away at your monthly mortgage, and after 1 year of living in your VA home, you can MOVE OUT! Have someone else pay more than your rent and prepare yourself financially to secure your second home,

The “Why”

So, now that we know what we have, let’s consider why we should purchase soon. Paying rent is a consistent loss. unless you are paying rent in a lease-to-own scenario you are just paying someone else’s mortgage. Buying a home will be putting your money into the safest investment there is real estate. Own your property and begin renting it. If you choose to live in the area start making a plan to purchase a second home, OR just own the home you live in. Stop worrying about the landlord and start learning the nuanced world that is home ownership. The best part about your VA home is you’re not going to need to dip into your funds to pay for the home. When you purchase a house there are plenty of fees and people to pay that can take a dream home off the table for most. As a veteran, you can hold onto your cash after you pay your realtor and prepare yourself to build an empire or save it and await the inevitable mishaps in life with solid financial security. Truly the choice is yours with what you want to do with your VA loan, but hurry the fuck up and buy a house. The world can be a shitty place when you’re a vet so take EVERY advantage you’re given.

The Basic Steps:

1. Eligibility Check: Make sure you’re eligible for a VA loan. Eligibility typically requires that you are a veteran, service member, or a surviving spouse of a veteran. You’ll need to meet certain service requirements as defined by the Department of Veterans Affairs.
2. Certificate of Eligibility (COE): Apply for a Certificate of Eligibility (COE) from the VA. This document is proof to lenders that you are eligible for a VA loan. NEED ONE? Click HERE
3. Budgeting: Before you start looking for a home, establish a budget. Consider your income, expenses, and future financial goals. Remember to take into account other costs associated with homeownership, like insurance, taxes, and maintenance.
4. Preapproval: With your COE, approach VA-approved lenders and get preapproved for a loan. Preapproval will give you an idea of how much you can borrow, which can guide your home search. Finding a great Lender will be the most important part of this process. They can protect you from poor real estate practices and will always protect your money for the entirety of your loan.
5. Real Estate Agent: Hire a real estate agent, preferably someone with experience in VA loans. They can help guide you through the home-buying process. Yes, you can do this part on your own and split the commission with the other realtor who is selling the home. Generally, if you are going to represent yourself the split total is 6% of the price of the home. That means if the house is $100,000 the realtors will be splitting $3,000 a piece which is 50/50, or 3% each. If YOU are representing yourself the generally accepted split is 2-2.5% to 4-3-5% because the other realtor anticipates doing more work to help you through the process. That comes down to negotiation and guidance. That 2-2.5% would come back to you instead of paying a realtor to represent you, so if you bought a $100,000 home you would pay $3,500-$4,000 to the seller’s realtor and you would retain the remainder saving you $2,500-2,000. Want more info on being your realtor? Send us a message below and we will square you away.
6. Home Search: Begin searching for a home within your budget. Keep in mind your needs, such as the size of the home, its location, proximity to amenities, etc. When home searching, go see 3 houses a day at least 3 days a week.
7. Make an Offer: Once you find a home that suits your needs, make an offer through your Lender/real estate agent. In the offer, specify that you intend to use a VA loan.
8. Purchase Agreement: If your offer is accepted, you’ll enter into a purchase agreement. This contract will detail the terms of the sale and is contingent upon you securing VA financing.
9. Appraisal: All homes purchased with a VA loan must have a VA appraisal. The VA appraiser ensures the home is worth the price you’re paying and meets the VA’s minimum property requirements.
10. Home Inspection: Though not required by the VA, getting a home inspection is highly recommended. This will help identify any potential issues with the house that aren’t necessarily deal-breakers but could lead to costly repairs in the future. With new construction, there are some extra steps here. All that needs to be said for now is to check every inch of that house and tell the builders to repair EVERYTHING! Getting a home inspection can be costly but if you negotiate properly the seller may include it in the cost so you aren’t paying out of pocket. Sometimes they have an inspection completed already so check with them first. If the home has a septic/well system for water and water waste get an inspection!!!
11. Loan Processing: Your lender will then process your loan. This involves verifying your income, assets, and financial history. Be prepared to provide any necessary documents.
12. Underwriting: After your loan is processed, it goes to underwriting. The underwriter will decide whether to approve your loan. They’ll evaluate your ability to repay the loan, and the property details, and make sure everything meets the VA’s and lender’s guidelines.
13. Loan Approval: Once the underwriter approves the loan, you’ll receive a “clear to close”, meaning that all conditions have been met.
14. Closing: You’ll attend a closing meeting where you’ll sign a lot of paperwork, finalize your loan, and take ownership of the home. Your real estate agent and loan officer will guide you through this process.
15. Move-In: After the closing, you are officially a homeowner. You can move into your new home and start making it your own.
16. Hardware Warranties: Make sure you call the company that built every major piece of hardware in your house and change the warranty information over to yourself. EVERY SINGLE MACHINE, including washer/dryer, A/C unit, HVAC, Fridge, Water heater, etc.

Tempus est nunc

The time is now. When you have the information to buy, post a picture of your badass new investment. As impossible as fucking this process up is, I take no responsibility for any of our Veteran brothers and sisters taking this information and figuring out how to choke on their keyboards or any other way to fail a guaranteed good deal. I’m kidding… This is a tough process, especially when it’s your first home. If you need extra help that the video and article didn’t cover, hit us up in a message below or post a comment and let us know where we fell short.

Trusted Lenders:

These are recommendations and I will receive compensation if you use them! I do however trust them personally and recommend them. If you want to look for someone else or know someone please do so and do not let me influence your decision.

If you want to talk to a great lender for a VA Home loan click HERE.

This is a plug for my brother-in-law… he did however secure a 2.25% loan for my home on a refi on a VA loan, which is the best rate I’ve EVER heard of. So yes, this is a shameless plug for my relative… He also fucking crushes it and has a team of 15 hard-working MFrs who are ready to help you every step of the way.

If you are looking for a lender for a more flexible VA Loan type Email Hunter@skyviewlendinggroup.com I am currently working with Hunter and he is an absolute genius when it comes to the versatility of the VA loan.