What You Don’t Know About the VA Home Loan Program

From an underwriting perspective, the withdrawal option is similar to a purchase loan, as homeowners must meet credit score, income, and appraisal guidelines.​

The other option is called the Interest Rate Reduction Refinance Loan (IRRRL), also known as VA Streamline, which can be used to get a lower interest rate on an existing home loan and s comes with a 0.5% finance charge.

7. VA loans are not more expensive and do not come with higher interest rates.​

In fact, VA loans have had the lowest average interest rate in the market in recent years. They also have the lowest average cost and fees compared to conventional, FHS, and USDA loans.​

8. VA loans don’t take much longer to close than other home loans.​

On average, these loans take a little longer to close than conventional loans. But it’s a matter of days, not weeks. Over the past seven years, the average VA closing time has been 48 days, compared to 45 days for a conventional loan. a house.​

9. Houses don’t have to be in pristine condition.​

You can buy a repairman with a VA loan.​

“It will always be on a case-by-case basis, but there’s no express prohibition against it,” Birk said. “VA and FHA loans have an assessment process that seems different than conventional loans.” The first element involves an appraisal that the home is being sold at fair market value and that the property is safe, healthy and hygienic.​

While it’s always a good idea to invest in a good home inspection, VA-certified appraisers are not home inspectors. They usually look for things related to local building codes, such as potential lead in peeling paint on older homes or missing handrails on stairs. They don’t look behind walls or inspect air conditioners up close.​

“There may be some things that an appraiser notes while at the property as a problem that needs to be fixed before the loan closes. But that doesn’t automatically mean the deal is dead,” Birk said.

Nor does it mean that the seller should automatically pay to make these repairs. Instead, it becomes a process of negotiation between buyer and seller as to what gets done and who pays for it.​

10. Home adaptation grants are available for service members with service-related disabilities.​

There are five grants under the Housing Loan Benefit for veterans and military personnel with certain service-related disabilities that allow them to purchase or change a home to meet their needs. These include modifications such as the installation of ramps or the widening of doors. The grant a veteran is eligible for is based on their disability rating. For example, veterans with a high degree of disability may be eligible for Specially adapted housing (SAH), which can provide up to $101,754 to buy, build or change your home.​