“Our VA Loan Is A 10”
Saving a $100,000 down payment to buy a home with six children in the family is no easy task.
That’s why David Dei Rossi, 60, and his wife Cindy, 50, chose a VA loan when they bought their home in Gilroy, Calif., in March 2014.
The VA loan, guaranteed by the U.S. Department of Veterans Affairs, allows zero-down financing and offers borrowers competitive interest rates and flexible guidelines to qualify.
“If you’re looking at a $500,000-to-$600,000 house in the Bay Area and you’re going with a conventional loan with 20 percent down, you’re looking at $100,000 to $120,000,” Dei Rossi says.
“When you’re raising six kids and putting them through college, it’s hard to come up with $100,000.”
A conventional loan doesn’t require a 20 percent down payment, though a smaller percentage requires mortgage insurance. The VA loan allows no down payment and doesn’t require mortgage insurance.
“Being able to use the VA loan was just a blessing,” Dei Rossi says.
A former U.S. Air Force firefighter, Dei Rossi was stationed at March Air Force Base in Southern California and then in the U.K. from 1973 to 1977.
He’s now retired from NASA’s Ames Research Center, an aeronautics, exploration technology and sciences research and design facility, commonly known as NASA – Ames, in Moffett Field, Calif.
House With Modern Conveniences
Before they bought their home, Dei Rossi and his wife went house-shopping in their former neighborhood, but were disappointed with the older smaller homes they found there.
Instead, they chose to move a little further away from a local hospital where Cindy works in the IT department.
The sacrifice of her shorter commute meant the couple could purchase a larger home and one that was brand new.
The $577,000 home they selected has two stories with 2,030 square feet and plenty of what Dei Rossi calls “modern conveniences,” including dual-paned windows, energy-efficient appliances, indoor fire sprinklers, Internet and cable TV wiring and more.
VA Loans For New Construction
Buying a new construction home was no barrier to Dei Rossi’s VA loan. In fact, he says, it might even have helped him close the loan faster.
That’s because the VA requires homes purchased with a VA loan to meet minimum habitability standards.
If repairs are necessary, it’s up to the seller to make them.
That’s a benefit for buyers since their home will be in better condition when they purchase it, though it can cause some delays.
“With purchasing a brand-new home, we didn’t experience any of that angst or have to jump though those hoops. It was a very clean process,” Dei Rossi says.
“It was easier than buying a car.”
A Recent VA Streamline Refinance
In fact, Dei Rossi liked his VA loan so much that he streamline refinanced into a new VA loan in early 2015.
The VA streamline refinance, also known as a VA-to-VA refi or Interest Rate Reduction Refinance Loan (IRRRL), has relaxed guidelines and requires very little paperwork. It allows VA borrowers to get a new VA loan with a lower interest rate and monthly payment.
The IRRRL allows borrowers to cash out up to $6,000 for home energy-efficiency improvements. Closing costs can be added to the loan amount or offset by a slightly higher interest rate.
To qualify, borrowers must certify that they currently or previously occupied the home.
“We lowered our interest rate from 4.25 percent to 3.5 percent,” Dei Rossi says. “We saved almost $300 per month.”
Overall, Dei Rossi says, “The VA loan is a 10.”
“If you have that opportunity — you have your certificate of eligibility, you qualify and you have enough income to make your payments,” he says, “the VA is the way to go.”
This interview is part of a series of stories covering veterans and homeownership. TheMortgageReports.com is honored to highlight these honest, first-hand accounts.
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