+1 vote
We find nice homes but, many sellers say they don't want to go VA because it's too complicated. It's becoming difficult to find a home. How can we streamline and simplify this process?
asked Dec 17, 2017 in VA Loans by anonymous

2 Answers

+1 vote
This is a common misconception among home sellers and inexperienced real estate agents alike. In fact, a VA mortgage is almost exactly like a conventional home loan, except it's often easier to qualify for!

So unless buyers like the idea of a house going into escrow, only to fall out because the buyer couldn't qualify, they should embrace VA buyers. And it's the right and patriotic thing to do anyway.

You can relieve their concerns by getting approved for their loan first and having a pre-approval letter. Also by showing them the article at the end of this answer, and by working with an experienced VA lender who is used to dealing with these issues and good and explaining them to sellers.

Here are a few of the myths these folks may have, from a more extensive article covering this topic.

Myth # 1: The Government Requires The Seller To Pay Your Loan Fees

That's not true. Rules about fees were only created to prevent service providers from overcharging veterans. For instance, a VA buyer cannot be charged a commission by the real estate agent for finding property. But real estate commissions are traditionally paid by the seller anyway.

Here are other fees the law says VA homebuyers cannot pay under existing law:

Lender miscellaneous charges (aka "junk fees") when the borrower is already paying an origination fee. The origination charge cannot exceed one percent of the loan balance unless the mortgage is a construction loan.
HUD or FHA inspection fees that home builders normally pay.
Prepayment penalties for the seller's existing mortgage.
Attorneys fees charged by the lender -- however, you can pay reasonable, customary costs for title work, which may include attorney services.

For nearly every transaction, home sellers don't pay any more for a VA borrower than they would a conventional mortgage borrower.

Myth #3: VA Mortgages Take A Long Time To Close

Another concern for sellers is that VA mortgages take a long time to close. That is also not true.

According to mortgage industry analysts at Ellie Mae, the average VA mortgage closes in 45 days, while the average closing time for all loans is 42 days. The difference is a mere three days.

You, as a buyer, can relieve the seller's concerns by getting pre-approved for your VA mortgage so you can close much faster. That means submitting an application, authorizing a credit report, and documenting your income and assets.

Mortgage pre-approval, also called credit approval, means that you are good to go and can close as long as the property meets the lender's guidelines. If all you need is an appraisal to close, you can probably get that in ten days or fewer.

answered Dec 19, 2017 by GinaPogol (47,650 points)
0 votes
VA LOANS are not difficult.  I recently closed on a Veteran Borrower with 587 credit scores and 58% DTI. Many VA LENDERS have mortgage lender overlays on VA LOANS.  

Gustan Cho NMLS 873293
The Gustan Cho Team at USA MORTGAGE
answered Feb 6, 2018 by GustanCho (106,540 points)

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