There are many VA home loan myths around that stop people from getting their dream home. Most of the myths related to the questions such as when and who can be eligible for a VA Loan. You hear a lot of stories from friends and family. Some of them are true and some not. If you consider some of these myths by just listening, you could end up missing out on excellent mortgage products available. Do not let these misconceptions stop you from securing a loan for your home.
Top VA Loan Myths Every Borrower Should Know
Myth #1: VA loans are available for you to use only once
This is false. People think that if they currently have a VA loan, they are not eligible for a second one. The thing is that once you clear your current VA loan, you are eligible to use the program again. But there may be slightly higher at closing.
Myth #2: VA members will get a mortgage
Whether Veterans or normal people, nobody will get any type of mortgage. You need to get an approval for a mortgage. Based on the program you choose, a specific debt-to-income ratio and other factors should be met, importantly credit. When a lender guarantees a VA loan, they mean that the VA backs the loan.
Myth #3: VA appraisals are not possible to pass
There is a slice of truth at this point. However, VA appraisals are possible to pass. But yes, VA appraisals are stricter than an appraisal with a different mortgage type. However, VA home buyers don’t have any issue with the VA appraisal at all.
Myth #4: Need a higher down payment for home prices
The home prices have increased over the last ten years. This is making tough for the home buyers since down payments lower the costs of monthly payments. If you go for a higher down payment, you would be getting lower monthly payments. But yes, with a VA loan, you can skip the down payment for a house. For an affordable home, you should find a home that’s within your means. For a VA loan, you probably don’t need to make a larger down payment to be eligible.
Myth #5: VA loans take a long time
There is some truth in this one. When compared to FHA loans, VA loans are the slowest program. VA loans will take a little more time to close than another program, but they do not take forever.
Myth #6: VA Loans come up with Higher Interest Rates
This is not true. VA loan interest rates are lower than competitive rates on conventional loans. The thing is that when you are looking for rates, ensure you are getting an annual percentage rate (APR) along with your quoted rate. A higher APR generally means higher fees.
Myth #7: Most Veterans are not eligible for VA Loans
This is not true. In fact, most Veterans can get VA loans. The approval percentage of the VA loans has been drastically increased.
Myth #8: You are not allowed to buy a short-sale or foreclosure property with a VA loan.
In fact, you can buy a foreclosed or short-sale property until it meets the VA’s minimum property requirements.
Myth #9: VA loans have limits
There are no limits to the loan, but there are limits on the liability that the VA will assume, which also rely on the county.
Myth #10: With a VA loan, you are allowed only to buy a home.
The truth is that VA loans can be used to buy a home, repair or renovate an existing home, or buy a lot.