CASH BACK REBATES ON A "VA LOAN" HOME PURCHASE! Is it true??
PLEASE READ: As a retired Marine it bothers me to hear about REAL CASH Rebates from a VA home loan purchase!
Answer: Yes, but the bigger the rebate THE MORE "YOU" THE VETERAN ORIGINALLY PAID!!! (I tell you what I will do, if you give me 4 apples I will rebate you 1 back!!!)
When lenders (won't mention which credit unions or organizations) offer a rebate (money back Cash) at the table, it is really something YOU already paid. According to the "VA Lender's Handbook:
For other types of refinancing loans and all purchase/acquisition loans, the veteran generally cannot receive cash from loan proceeds. The only exception is the refund of items for which the veteran paid cash, which were subsequently included in the loan amount.
So on a VA LOAN, if I negotiate the seller to concede a 3%-4% assistance to a you (the military veteran) "the buyer" and you write a $500 earnest money deposit, AND the seller's concession covers your settlement expenses you get the $500 back!!!
As a REALTOR I tell my military buyers that if I can't negotiate your home warranty, I will buy you one! That's different. Perhaps if I charged military veterans a $1,000 administrative/transaction fee I would also rebate them $800!!!
Some agents depending on their business model may charge a transaction, administrative or other fee, then they may rebate part of that back. If the lender charges you an additional 1% origination fee and 1.5% discount points, they may REBATE part of that back to you! That's how it works, SO..... when someone gives you a rebate they are actually giving you part of something you ALREADY PAID!!!
Since I use lenders that do not charge those fees, and since I do not charge the military veterans other fees there are no rebates- sorry!
The VA Loan Guidelines are standard for all VA Loans. By educating our VA buyers we empower them to make better decisions.
What are some of your experiences with institutions that offer cash back to buyers using a VA Loan?
Go on my website www.CarlosCardo.com and ask me more questions related to the real estate process and I will do my best to get you an accurate answer!