Debunking VA Loan Myths: Separating Fact from Fiction

Are you a veteran and looking to purchase a home? Have you looked into what type of financing you are going to use to purchase that home? Are you eligible for a VA loan? These are just some of the questions I am sure you have thought about but may not have figured out yet. Do not make the same mistake we did after leaving the military.

When my husband left the Marine Corps we purchased our first home (all 995 sqft) in Chesterfield, Virginia using a VA loan. We sold that home and moved to Florida so my husband could attend law school. We started to looking at homes in 2004. If your memory is better than mine, you will remember how hot the market was in 2004. We found a great home and started the financing journey. We were under the impression we could only use the VA loan one time. Neither our agent nor our lender corrected us. Instead, we ended up in a loan with a horrible rate. I wish I knew then what I know now. We eventually sold that residence and have used a VA loan to purchase two additional homes (yes, we get bored easily).

So you don’t make the same mistake we did, here are some myths and facts about he VA loan process.

 

1. VA loans are only for first-time homebuyers.

False: VA loans are available to eligible veterans, active-duty service members, and surviving spouses regardless of whether they’ve purchased a home before. The misconception stems from the belief that VA loans are a one-time benefit. In reality, eligible borrowers can use VA loans multiple times.

 

2. VA loans take longer to close.

False: VA loans can close as quickly as other loan types, especially with efficient lenders. The key is to work with experienced professionals who understand the process and can expedite approvals.

 

3. VA loans have high interest rates.

False: Contrary to popular belief, VA loans often have competitive interest rates compared to conventional loans. The Department of Veterans Affairs guarantees a portion of the loan, making it less risky for lenders.

 

4. VA loans require perfect credit.

False: While good credit is beneficial, VA loans may be available to borrowers with less-than-perfect credit. The VA doesn’t set a minimum credit score requirement, but individual lenders may have their own criteria.

 

5. VA loans have strict property requirements.

False: While there are some guidelines, VA loans can be used for a variety of property types, including single-family homes, condos, and even multi-unit properties. The key is to ensure the property meets the VA’s minimum property requirements.

 

6. VA loans have high upfront costs.

False: VA loans typically have lower upfront costs compared to conventional loans. Borrowers can finance the funding fee (a one-time fee paid to the VA) into the loan amount, reducing the out-of-pocket expenses. If you or your spouse are a disabled veteran, the funding fee will be waived. 

 

7. VA loans can only be used once.

False: Eligible borrowers can use VA loans multiple times. Whether you’re buying a new home or refinancing an existing one, VA loans remain a valuable resource. Don’t make the same mistake we did. Use your earned benefits as many times as you can. 

 

8. VA loans are funded by the government.

False: VA loans are provided by private lenders and guaranteed by the Department of Veterans Affairs. The VA’s role is to ensure veterans receive favorable terms and protection.

 

9. VA loans require a down payment.

False: VA loans offer the benefit of no down payment, although borrowers can choose to make one. This feature makes homeownership more accessible for veterans. Do not pass up your dream home simply because you cannot afford that down payment. 

 

10. VA loans are complicated.

False: With the right guidance, VA loans can be straightforward and beneficial. Working with experienced loan officers who specialize in VA loans ensures a smooth process.