We are seeing a lot more VA buyers lately so we thought it warranted a blog. VA financing for veterans remains the best deal on the market, as the rates are very low (lower than conventional rates), there is no mortgage insurance, and no down payment is required.
VA buyers can in fact buy with no money out of pocket, using lender and seller credits to cover all closing costs.
There are a few drawbacks to VA: (1) There is a VA funding fee that must be paid up front that varies depending on veteran discharge status and other factors; (2) VA loans take a bit longer to close – can’t do our “14 Day Close;” and (3) we have to use VA Appraisers instead of the seasoned appraisers in our own Appraisal Management Company; VA appraisers are slower and sometimes not as skilled as we’d like.
Also – there are certain “non-allowables” or fees that VA buyers are not allowed to pay that add up to a few thousand dollars. Rather than specifically naming all the “non-allowable fees,” it is easiest to just get a seller credit of $3,000 for closing costs, to ensure that the buyer does not pay any “non-allowables.” A request for credit of at least that size should accompany every VA offer.
Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646
