Posted by Meredith Starr ● August 30, 2016

Top 5 Misconceptions About VA loans

veteran and daughter

The ability to use a VA loan to purchase a home is a much-deserved benefit. However, with all of the different guidelines and moving parts of a loan, it can get confusing. You may not fully understand what benefits are actually a part of this government-backed program or how you can take advantage of them. With that in mind, we bring to light five common misconceptions about VA loans below in hopes that Veterans and Servicemembers know how they can best use their due benefit.

Misconception 1: I can only use my VA loan benefit once.

Don’t hesitate to use your VA loan! If you are considering passing up your VA Loan benefits in order to save them for that perfect forever home, think again. When you buy a home with a VA loan and then sell it, your benefits are fully restored and you can use them again to buy a new home with your benefit. The second time around, the rules and guidelines are the same as the first time, so most veterans could put $0 down again!

Misconception 2: I can only buy one home with my VA loan.

You can buy a new home using a VA loan even if you already own one that you purchased using a VA loan. You can even use it without refinancing your existing loan to FHA or conventional. VA allows veterans to purchase a new primary residence even if you currently have a VA loan under their “subsequent use” guidelines. Depending on the amount of entitlement you used on the first VA loan and the county loan limits where you are buying your new home, many veterans are able to purchase their next home with no money down again! This is an often misunderstood rule so don’t let someone tell you that you have to refinance your first home to a non-VA loan before purchasing that second home with a VA loan.

Misconception 3: I will have to spend money on mortgage insurance if I don’t make a down payment.

Many people think that they need mortgage insurance to get a VA loan because the program doesn't require a down payment. Since the VA is insuring the first 25% of your loan for your lender, however, you do not need mortgage insurance, which is typically purchased to cover 20% of your loan. This is one of the great perks of a VA loan and saves veterans a lot of money!

Misconception 4: I have to use a military bank to process a VA loan

You do not need to use a military-associated bank, you just need a lender that is approved by the VA. Using a military bank may not even be the best choice. Some military banks have a varied focus that may include credit card servicing or checking accounts, whereas here at Apex our entire focus is your home loan. We have loan officers that specialize in VA loans, are veterans themselves, and are knowledgeable on the latest VA guidelines. Many of our loan officers are also Certified Mortgage Planning Specialists (CMPS) and have earned the skills to stand above the rest of the competition.

Misconception 5: VA loans don’t allow me to combine my fiancé’s income with mine to qualify.

Most VA loans are made to the veteran only, or the veteran and their spouse. However, the VA does allow a veteran to get a mortgage with someone who isn’t their spouse under the Joint Loan guidelines. Joint Loans aren’t restricted to just a veteran and their fiancée, although that is a common usage of joint loan guidelines. Joint loans have three important distinctions from other VA loans, though. First, they require prior approval from the VA. Second, they will typically require some down payment. Third, the veteran borrower must qualify for the part of the mortgage that is their responsibility. For example, if the joint loan is to a veteran and their fiancée, the veteran’s income must be sufficient to qualify for at least half of the mortgage payment.

Our VA Loan Expert Is On Call

Have questions about VA loans? Contact our very own VA loan expert and veteran Brian Willingham at bwillingham@apexhomeloans.com or 301-512-6652.

Topics: Buying a Home, VA Loans, Use VA loan benefit for 2 houses?, Top Misconceptions of VA Loans, combined income va loan, can i get a va loan with my fiance?, mortgage insurance required with VA loan?

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