This article was written for our sponsor, GoVA Loans.
For active service members, retired military and veterans, VA loans are one of the most convenient avenues to home ownership. No down payment, no credit score requirement, no risk of Private Mortgage Insurance fees — these loan programs offer distinct advantages over their conventional counterparts.
Unfortunately, not many are aware of the benefits that come with VA loans — or are perhaps too dissuaded by their perceived negatives. That misinformation is a major reason why Phil Jawny, founder of GoVA Loans, has made it his goal to provide in-depth education on the ins and outs of VA loan programs.
"For the last 10 or 12 years, I've always focused on making sure I take the extra time to help military families and provide VA lending, because there are so many myths about VA mortgages that scare people," said Jawny, who has been in the lending business for more than 20 years. "They scare banks, they scare other loan officers. They're like, 'Oh, it's too much paperwork. Too much this, too much that.' They don't have any experience with it."
By dispelling some of these common VA loan myths, Jawny believes veterans and active military service members will be better equipped to determine if the loan program is the best option for them.
MYTH 1: Most military members don't qualify for VA loans.
"One of the VA loans myths is that the criteria for qualifications is highly exclusive — and it's the opposite," Jawny said. "VA loans are much simpler, and veterans, active service members, reservists, national guard members, public health service officers and even surviving spouses are eligible for home loan benefits."
In essence, VA loans don't require years of service, prestigious awards, or any other type of elusive criteria. They were designed to make the home-buying process for military service people as simple to wade into as possible.
The only qualifying conditions that must be met vary depending on whether period of service occurred during wartime or peacetime — 90 days for the former and 181 days for the latter — while National Guard service must total more than six years.
MYTH 2: You need to have a perfect credit score.
Although other loan programs may have credit requirements, the VA loan program doesn't have any specific benchmarks that eligible applicants must meet. Instead of punishing borrowers for credit blemishes by increasing rates or prices, the VA loan is far more flexible and forgiving.
"Not a lot of people have high credit," Jawny mentioned. "Since we're just coming out of a recession, everybody is in a rebuilding phase. The last two years, it's just been everyone trying to rebuild and recover."
According to Jawny, a major strength of the VA loan program is that it recognizes the reality of these unpredictable financial issues that cause credit issues. There are no origination charges, no Private Mortgage Insurance costs, no higher interest penalties — no matter if your credit score is 600 or 800, the rates remain the same.
MYTH 3: Service members serving overseas cannot get approved for a VA loan.
If a current service member is looking ahead for a place to settle down once they're stateside, or their spouse is house-hunting while their partner is overseas, it's still possible to get approved for a VA loan, regardless of their current location.
Granted, it's not always easy to navigate the home-buying process while overseas, and there's a sore need for a way to simplify the process.
"This is actually one of the things we're focusing on with our technology — being able to have an app that allows for very easy communication back and forth globally," Jawny explained regarding one of GoVA Loans' latest projects. "That way, service members that are deployed overseas can have easier communication with their spouse and their family, as well as lenders, during the loan process."
MYTH 4: VA loans take too long to close and have too many appraisal requirements.
For Jawny, one of the most surprising comments he gets from his military clients is that they'd prefer to go with a conventional loan over the VA option. Oftentimes, they cite VA loans cost too much money, aren't taken seriously since there are no credit requirements or add extra time to the closing process.
According to Jawny, this misconception originated more than 20 years ago when the overwhelming number of options and hoops to jump through made VA loans too confusing for even the supposed experts to understand.
"Back in the day, there were a lot of roadblocks basically because there was a major lack of education," Jawny explained. "This is where VA loans got totally misconstrued. The professionals within the industry were greatly confused themselves, and then you had the blind leading the blind."
"VA loans are executed on the exact same platform as every loan in any other program out there," Jawny continued. "The same people that can approve a VA loan are the same people that can approve a conventional loan or some other kind of portfolio loan or mortgage solutions."
In other words, while there are still some differences between VA loans and conventional loans, using the former still puts you well-within range of an average closing date, especially in the hands of a lender who knows their way around the process.
MYTH 5: VA loans can only be used one time.
Once you buy one home using the VA program, you aren't able to use it again, right? Wrong.
In fact, VA loans are a life-long benefit for service members, whether current or former, so there is no set limit to the amount of times that the program can be utilized.
"People think that they'll end up going into a rental instead of buying a house, since their current home in another state was purchased with a VA loan, or they've already used their VA loan and think they can't [again]," Jawny said. "No, not true. You can still get another VA loan with 100 percent financing. You don't have to put money down. You can get a hundred VA loans if you wanted to, over and over and over again."
For those eligible for a VA loan, the benefit of repetitive use can lend itself greatly to building one's wealth through real estate.
This article was written for our sponsor, GoVA Loans.