The VA Loan My 1st Loan

By
Real Estate Agent with The Lewis Team at Keller Williams Cal BRE #01352522

The old VA loan. It was my very first loan and I thought it was a great loan. No closing costs for me to pay and a good interest rate for the time. Since part way through the recent real estate boom I have not seen a client use a VA loan. It's been over 5 years since I've seen any of my buyers or a buyer buying one of my listings use a VA loan.

Why do you suppose this is? Does the loan not go up high enough for a vet or active duty military to buy an expensive San Diego home? Are other loans just that much better? Now that so many of the interest only loans are gone is the VA loan a good choice? Are these loans still popular in other areas of the country?

Any lenders that could answer these questions I would greatly appreciate it.

Mike Lewis Real Estate Agent for Dawn Sells San Diego

If you're interested in San Diego Home Buying and San Diego Real Estate make sure you contact Mike and Dawn Lewis at Dawn Sells San Diego.

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Rainer
11,142
Jeff Judge, Baltimore's FHA/VA Purchase, Streamline, and Reverse Mortgage Expert
Eagle Nationwide Mortgage - Owings Mills, MD
VA has the same loan limits as FHA, so if you aren't seeing FHA loans come through then there is a good chance that it is the loan limits that are too low.  Not to mention you can get the same loan or better with a lower funding fee / upfront MIP fee by using FHA. Good post.
Sep 18, 2007 03:47 PM #1
Rainer
340,963
Kris Wales
Keller Williams Realty - Lakeside Market Center - Macomb, MI
Real Estate Blog & Homes for Sale search site, Macomb County MI
I think it must be the area.  I see a few VA loans in our market area each year, although not as many as we did 8-10 years ago.  I think it's a wonderful product and one all of our current and former service men and women should consider.
Sep 18, 2007 10:27 PM #2
Rainer
71,885
Larry Wright
nwRealty.Com - Tacoma, WA
Mike, we're seeing more interest in VA financing with the active and retired military in the Puget Sound Area.
Sep 19, 2007 04:27 AM #3
Rainmaker
215,098
Mike and Dawn Lewis
The Lewis Team at Keller Williams - San Diego, CA
The Lewis Team at Keller Williams in San Diego CA

Larry,

No not really but San Diego is a military town and we used to see alot of them here.

Mike

Sep 19, 2007 10:00 AM #4
Rainmaker
223,210
John MacArthur
Century 21 Redwood - Washington, DC
Licensed Maryland/DC Realtor, Metro DC Homes
Mike - There are a couple reasons I can think of. In the recent market boon, sellers did not want nor did they have to make cosmetic repairs to the home. Most VA inspectors required things to be repaired. Using a VA loan worked to the disadvantage of buyers in competitive bids. The other thing would be the VA monthly fee that is attached to the loan. I don't know what it is called but it is similar to PMI. This added cost put some VA loans at a higher monthly cost than conventional loans. Of course, then you had the loan limits.
Sep 21, 2007 12:09 PM #5
Rainmaker
139,388
J Perrin Cornell
Coldwell Banker Cascade Real Estate - Wenatchee, WA
Broker, ABR, VAMRES
Ok first VA limits are NOT the same as FHA. In our area for example FHA is 216 or so and VA is same as FNMA. Plus you can go higher if you choose to make a down payment. Next VA funding fee is not always an issue. A disabled vet pays no funding fee. There are something like 2000000 vets running around that have only a 10% disability. It doesn't need to be complete disability as in quadriplegic. Underwriting is easier than FNMA (plus you don't need MIP underwriting too)... in fact like FHA it is not FICO driven (not sure on that point but I believe it to be so). Just closed a sale on a Vet that had a 620. 100% financing on a $341,000. The appraisal was a breeze and the only hassle was about $1,000 in costs the seller had to eat.... not bad as they got a full price offer. And it took 26 days. It is a very viable alternative!
Sep 22, 2007 02:10 AM #6
Rainmaker
215,098
Mike and Dawn Lewis
The Lewis Team at Keller Williams - San Diego, CA
The Lewis Team at Keller Williams in San Diego CA

John and Perin,

Thanks for that info. I think the VA loans could very well be on the comeback.

Mike Lewis

Sep 22, 2007 08:33 AM #7
Rainer
93,096
Andrew Trevino
ADT Real Estate - Wilkes Barre, PA
Wilkes-Barre Homes For Sale

Mike,

Thanks for bringing this up. I don't see VA loans in my market at all. That's not to say they aren't out there, but our area isn't a big military area either. I appreciate the insight into the loans provided through the post and the comments. I've learned a lot just by reading this. Thanks again.

Sep 26, 2007 08:27 AM #8
Anonymous
Don
I was wondering myself about va loans and whether it would be a good deal or not vice a conventional loan.  I am considering making an offer on a fixer-up but had always heard that va required a inspection  and was uncertain this kind of home would qualify for any standards they may have.  Does anyone know how that works and whether you have to get some sort of minimum inspection standards passed?
Oct 02, 2007 11:11 AM #9
Rainmaker
215,098
Mike and Dawn Lewis
The Lewis Team at Keller Williams - San Diego, CA
The Lewis Team at Keller Williams in San Diego CA

Andrew,

I've learned alot too.

Don,

A VA inspection is very strict. I'm not sure how they would feel about lending on a fixer upper. My expereince from helping clients using the VA in the past was that using a VA Loan protects the buyer by being more strict. Looking out for the Veteran. Any other comments from lenders or agents doing VA Loans.

Mike Lewis

Oct 10, 2007 10:21 AM #10
Anonymous
Joel Brattin

Mike, our company Shield Mortgage specializes in VA financing right here in San Diego.

Right now the Military has a huge "leg up" on any other buyer for the simple fact that they can buy a home with no money in the bank with 100% financing up to 417k.  They can even do up to a million with a downpayment and still get smoking good rates.

 

I would be more than happy to prequalify any of your buyers to get them ready to pull the trigger.

 

If you have any questions, feel free to call me at 206.769.7373.

 

Joel Brattin

President

Shield Mortgage

Jul 31, 2008 07:32 AM #11
Rainer
913
Rowena Cadacio
Coastal Country Real Estate - San Marcos, CA

San Diego is a market for VA Loans because we have the naval base here and Camp Pendleton so a lot of military servicemen who wants to buy a house should be using this loan. It is not as common as other conventional loans to use because not all brokers and lenders are VA approved. All federeally backed loan have different guidelines compared to conventional loans. It has it's pros and cons but all loans do, you just have to find the best one that will suit your buyer depending on his situation and budget. He might be better off with a conventional loan or maybe not depending on his credit, how much house he is looking for, what he can afford or what the market rates are.

I would strongly suggest that he prequalify for both VA and conventional loan so that he can compare different scnarios and weigh what suits him best.

good luck

 

Aug 26, 2008 03:41 AM #12
Anonymous
Dylan D.

I'm a veteran shopping for a home.

The VA guaranteed loan ("VA loan") shouldn't be confused with a CalVet loan, which is actually a loan from CalVet.

VA loans are subject to the usual closing costs, as well as a VA funding fee as high as 3.3%. Therefore, while VA guaranteed loan is indeed a 0% down type of loan, it is NOT a $0 out of pocket loan by any means.

I'd say that the average veteran doesn't get out of the military and walk into a job that puts them in the market for a $500K house. If they did, they should probably be investigated, and they might have the cash reserves to make a down payment to enjoy the long term savings of doing so.

In today's foreclosure rich market, a bulk of the houses in the this veteran's price range are wrecks that would not pass a VA inspection. So there is incentive for me to just save up for a down payment and not use the VA loan guarantee.

Given this circumstance, the VA loan guarantee has become a somewhat hollow benefit, much like the GI Bill... but don't get me started.

DD

Feb 28, 2009 04:22 AM #13
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