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Well in response to someone raising the price of the home just because we are using our "earned" VA loan, I would go elsewhere. I understand we all have to live but seeing everything my family and I have endured during our time in the service, it's a benefit that was earned. I'm not insensitive to the fact that the seller will have to pay many of the fees but at the same time, most sellers are about the seller. I have no problem being about the buyer and using my VA loan doing it. At least I'm not deceiving anyone...not implying that anyone on this thread that are sellers would. However, let's not deny the fact that it happens time and time again.
I just thought of another thing. When speaking with a builders agent about a property that we are thinking of pursuing, he was more than happy to work with us even after I told him about the VA loan. I didn't mention it to him at first b/c that is not something you would normally bring up with a seller until and if he/she ask. I wasn't holding out on him b/c up until today, I didnt even know that the seller pays for the closing cost and some of the other fees. All I knew was that we didn't have to put money down and that we couldn't get raped on the APR. Anyway, the agent could tell I was very much inexperience and was trying to get a feel of what I was trying to do. He wanted to recomend me to their preferred lender and that's how the VA loan came about. Now mind you, he had already quoted me a price. So even after I informed him about the VA loan, he still informed me that he could throw in some extra upgrades. So either:
A. The house was overpriced to begin with (which goes back to my orig post)
B. He was just BSing me and hope that I wouldn't notice these things were not on the contract at the time of signing (can also go back to the orig post) or
C. They are really desperate to sell....hey, some profit is better than no profit
I look at this way, it goes both way and hopefully the buyer and seller can meet in the middle. If not, there is always someone willing to work with us.
I do a lot of VA Loans. I am in a military town and many military will use their VA. In a military town, we don't usually have a problem getting a VA loan approved by the seller. Things you must think about.. you won't be able to do homes that are "as is". VA appraisers are trained to make sure the home inspects properly, and may request certain repairs be done prior to closing. That will make an as is sale not work. With a VA loan you have a funding fee instead of PMI that can be wrapped into your loan amount. Not very much, usually 1.5% for the first time you use your VA, well worth it not to pay high PMI.
If you would like more information let me know.
Shelly
Has any of your clients used VA loans with new construction? To avoid moving twice, my husband and I think this is the way to go because it allows us time for the transition. It seems to me that VA loans are really about protecting the buyer. Obviously, I'm all for that!!!
Has anyone personally worked with anyone having a VA loan? We thought we found a good loan officer, but he wasn't certified to do VA loans yet. I know Countrywide will do them but I was wondering if anyone else know anything about them, used them, etc. Thanks in advance.
Let's get a few of the facts straight here:
VA loans are the best $0 down loan out there as long as you are going to be in the home for at least 3-4 years. There is no monthly mortgage insurance as it is all charged up front as a funding fee. The funding fee is equal to about 2.2% and is added on top of the loan amount.
Example: purchase a $200k house and your loan amount will actually be $204,400. FYI-if you have any amount of VA disability (even 10%) the funding fee is waived.
The seller does not have to pay all the closing costs!. There are a few fees that the VA will not let us charge the borrower like the closing fee ($250-$500 depending on what state you are in) and fees like doc prep, committment fee, tax service fee...basically all the "junk fees" that lenders charge. The other normal fees like origination fee, title insurance, survey, mortgage registration tax, recording fees, etc. can all be charged to the VA borrower.
There are 2 ways to cover the fees we can't charge which only amount to about $500-$1,000. One would be to have the seller pay them and the other would be to charge the borrower .125% higher on their interest rate (eg. 6.625% instead of 6.5% today).
There is of coarse the option to have the the seller pay all the closing costs so you could get into the house for almost $0 out of pocket. If the seller is going to pay any of the costs the price of the home will almost always be that much higher in effect. It's not like you are getting "screwed" out of that money and neither is the seller.
VA appraisals are a little more thorough than a regular conventional loan. They look out for the borrower and do not want them to buy some piece of crap with a bad roof, or bad electrical, bad plumbing, etc. So, on older homes their may be some repairs required for loan approval. Anything built in the last 20-30 years will probably pass inspection.
VA loans require just ok credit...say 620+. One poster mentioned they will go higher on debt to income ratios....that is not true. If anything they are a little more restrictive.
I am approved to do VA loans in all 50 states if you would like to PM me for more info.
Has any of your clients used VA loans with new construction? To avoid moving twice, my husband and I think this is the way to go because it allows us time for the transition. It seems to me that VA loans are really about protecting the buyer. Obviously, I'm all for that!!!
You can do VA loans for new construction. They actually go out for inspections during the building process. If you buy a new home that is all ready built then there has to either be a regular 10yr. builder warranty and you have to sign a form acknowledging that you realize the home was not VA inspected during construction.
Well in response to someone raising the price of the home just because we are using our "earned" VA loan, I would go elsewhere. I understand we all have to live but seeing everything my family and I have endured during our time in the service, it's a benefit that was earned. I'm not insensitive to the fact that the seller will have to pay many of the fees but at the same time, most sellers are about the seller. I have no problem being about the buyer and using my VA loan doing it. At least I'm not deceiving anyone...not implying that anyone on this thread that are sellers would. However, let's not deny the fact that it happens time and time again.
Whether it is a VA loan or any other type of loan...any time the seller pays the costs (which is probably about 90% of the time for 1st time buyers) those costs are built into the price of the home. If the sellers DEAD MINIMUM price to accept for the home is $200k and he is going to have to pay $6k in costs, then the lowest offer he would accept would be $206k for the property.
It has nothing specific to do with the fact you are utilizing your well deserved VA benefit.
When my husband and I tried to buy in 2004, we were just married and hadn't done our research. We just assumed a VA loan was going to be our best choice. We put an offer in on a house (169K), and our real estate agent told us that with a Veterans Loan through Navy Federal, our CC would be about 7-8K. She never told us that we could request that the seller pay any of it or that any of it could be rolled into the mortgage.
We ended up withdrawing the offer, because we felt with the CC as high as they were (plus high taxes, etc.), we didn't think we'd even break even when we had to sell in 3.5 years. The REA assured us that the market would stay strong, blah, blah, blah. Boy, are we happy we ended up renting!
VA loans are the best $0 down loan out there as long as you are going to be in the home for at least 3-4 years. There is no monthly mortgage insurance as it is all charged up front as a funding fee. The funding fee is equal to about 2.2% and is added on top of the loan amount.
Example: purchase a $200k house and your loan amount will actually be $204,400. FYI-if you have any amount of VA disability (even 10%) the funding fee is waived.
The seller does not have to pay all the closing costs!. There are a few fees that the VA will not let us charge the borrower like the closing fee ($250-$500 depending on what state you are in) and fees like doc prep, committment fee, tax service fee...basically all the "junk fees" that lenders charge. The other normal fees like origination fee, title insurance, survey, mortgage registration tax, recording fees, etc. can all be charged to the VA borrower.
There are 2 ways to cover the fees we can't charge which only amount to about $500-$1,000. One would be to have the seller pay them and the other would be to charge the borrower .125% higher on their interest rate (eg. 6.625% instead of 6.5% today).
There is of coarse the option to have the the seller pay all the closing costs so you could get into the house for almost $0 out of pocket. If the seller is going to pay any of the costs the price of the home will almost always be that much higher in effect. It's not like you are getting "screwed" out of that money and neither is the seller.
VA appraisals are a little more thorough than a regular conventional loan. They look out for the borrower and do not want them to buy some piece of crap with a bad roof, or bad electrical, bad plumbing, etc. So, on older homes their may be some repairs required for loan approval. Anything built in the last 20-30 years will probably pass inspection.
VA loans require just ok credit...say 620+. One poster mentioned they will go higher on debt to income ratios....that is not true. If anything they are a little more restrictive.
I am approved to do VA loans in all 50 states if you would like to PM me for more info.
~Tim
Tim, you have given me specific and clear information regarding VA loans. You might be hearing more from me. Thanks.
It has nothing specific to do with the fact you are utilizing your well deserved VA benefit.
Well that was my point. I don't expect everything to be "given" or "free" to me. They seller needs to make a profit which I understand and at the same time, the buyer wants an honest deal. Having the VA loans ensures me that I'm paying for what I "need" to pay for and not all these "junk fees" as you mentioned.
FYI- I was being very sincere on the "well deserved" part (couldn't tell if you realized that from your post).
There are lots of posts on this site about whether a seller should list with $xxx seller paid costs. IMO-almost every/every listing is negotiable with seller paid costs as it will just be included in the negotiated price.
When my husband and I tried to buy in 2004, we were just married and hadn't done our research. We just assumed a VA loan was going to be our best choice. We put an offer in on a house (169K), and our real estate agent told us that with a Veterans Loan through Navy Federal, our CC would be about 7-8K. She never told us that we could request that the seller pay any of it or that any of it could be rolled into the mortgage.
We ended up withdrawing the offer, because we felt with the CC as high as they were (plus high taxes, etc.), we didn't think we'd even break even when we had to sell in 3.5 years. The REA assured us that the market would stay strong, blah, blah, blah. Boy, are we happy we ended up renting!
Most agents have some general knowledge on the financing end, but you really want to meet with a loan officer to get the specifics and weigh all your options.
If you know you are going to stay in one spot for at least 5 years you may want to re-examine purchasing as there are some "deals" out there now with foreclosures, short sales and people who HAVE to sell.
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New construction
Exactly
