Top 5 VA Home Loan Myths

The VA home loan program is one of the most valuable benefits available to eligible servicemembers. Yet there are many common VA home loan myths that keep military members from using it to purchase a new home or refinance an existing one. Here are the top 5 VA home loan myths.

Myth #1: Renting is cheaper than buying a home with a VA loan

One of the biggest myths of homeownership is that it is far more expensive than renting, when in reality, mortgage payments are usually lower than your monthly rent. With record low housing prices, now is a great time to buy. If you think you could be in the market for a new home, consider exactly what you're looking for and compare the cost of renting vs. buying before you jump to the conclusion that you can't afford a home.

Myth #2: Short-sale or foreclosed properties cannot be financed with a VA Loan

When you're first ready to go out and search for your dream home, you may think you can't finance short-sale or foreclosed real estate with a VA home loan. Not true! These are included, and VA home loans can also be used to purchase a townhouse or condominium unit in a VA-approved project, a completed house or lot, or a house that may need minor improvements. The loans can also finance energy-efficient renovations as well as a current VA loan in order to reduce the interest rate.

Myth #3: All real estate brokers understand the VA home loan program

When you have in mind how you would like to use your VA loan, you will need to find a lender to help finance it. While some realtors can be good VA home loan advisers, keep in mind that there is no VA certification for real estate agents, so some realtors may not be reliable sources for this type of information. Instead, try to find a VA specialty lender, whose specializes in VA-backed loans and ask your loan officer for a referral for a military-friendly real estate agent.

Myth #4: VA appraisals are difficult to obtain

After you've confirmed your eligibility for benefits with a Certificate of Eligibility, the first step in getting a VA loan will be to request an appraisal. This is usually done by the lender using The Appraisal System online. You need to be aware that the appraisal will estimate the value of the property, but it will not do a full inspection. The house may still have defects, so you should carefully inspect the property or hire a reputable inspector. In most cases, this process takes the same amount of time for a VA loan as it does for a conventional loan.

Myth #5: You can only use your VA mortgage loan benefits once

If you've already had a VA loan, you may be concerned that you wouldn't qualify for another. You can, as long as you meet one of two requirements. First is that the property purchased with the previous VA loan has been sold and the loan was paid in full. Or, the qualified veteran-transferee - the buyer - has agreed to assume the VA loan and substitute his or her entitlement for the same amount originally used by the veteran seller.

For more information about VA home loans, contact aVA-approved lender.