Dispelling Popular Myths About VA Loans
A VA home loan is a mortgage option that requires no down payment and is partially guaranteed by Veterans Affairs. The program was established in 1944 and has helped millions of Veterans become homeowners. It has somewhat different criteria and a minor application procedure than a conventional loan. However, despite decades of historical accomplishment, several myths and misunderstandings prevent Veterans from acquiring first-time home buyer loans and enjoying their service benefits.
This article will dispel some of these misconceptions so that you can make an informed decision about whether or not a VA loan is the best option for your financial circumstances.
Popular Myths About VA Loans
- You May Only Have One VA Loan Active at a Time. Once you’ve earned this advantage, you’ll have it for the rest of your life. Qualified Veterans may apply for numerous VA loans throughout their lives, and they can apply for multiple loans simultaneously if they qualify. The only difference you will notice if you take out several VA loans simultaneously is the down payment needed for each successive loan.
- You Can Only Borrow up to a Specific Loan Limit. In the past, this was true; however, it is no longer the case unless you had several Veterans Administration home loans at the same time. Depending on your county’s loan limit, mortgage providers such as CMG Mortgage can enable you to borrow up to $5 million on a VA home loan with a $0 down payment. This is possible as long as you do not have multiple VA loans outstanding at the same time. Every VA borrower must show that they are eligible for the loan and adhere to all lending rules.
- Only If You Already Have a VA Loan May You Refinance into One. If you meet the requirements, you may refinance into a VA loan from any other loan type if you qualify. They may be used to refinance your existing home loan, up to 100 percent of the property’s value in certain instances. Doing so allows you to enjoy access to all of the program’s compelling advantages.
- VA Loans Are More Difficult to Get Approval for and Are Less Likely to Be Completed Successfully. In certain instances, qualifying for a VA loan is more straightforward than qualifying for a commercial loan. When it comes to income, debt-to-income ratios, loan-to-value criteria, credit history, and other factors, the VA loan is more forgiving than other types of mortgage loans. Lenders often require a specific credit score. However, the VA loan does not have a minimum credit score criteria in terms of eligibility. Veterans and current military personnel may finance a house sooner after a bankruptcy, foreclosure, or short sale than the general public.
- Sellers Are Less Likely to Accept an Offer from a Bidder Who Has a VA Loan. The false belief often perpetuates this myth that the seller is obligated to pay a significant portion of the buyer’s closing costs, and as a result, is less inclined to accept their offer. That is incorrect because the seller is simply obliged to pay for a termite inspection report most of the time. In most instances, the seller is not financially responsible for any additional expenditures, such as the buyer’s closing expenses.
As with other loan kinds, several variables are considered when determining which one is the best fit for you. If you’re a veteran or current military member, though, and your lender isn’t looking into a VA loan for your house purchase, you may be losing out on a great deal of money. Before making a final choice on your home loan, thoroughly research your alternatives and speak with a home loan expert.
Apply For a Mortgage Now at American Mortgage Solutions
If you are looking for a reliable American mortgage company, you can rely on us at American Mortgage Solutions. We offer services and assistance to ensure that it will be a smooth transaction for a first-time home buyer loan. Contact us today at (502) 327-9770 to learn more!