Approximately one third of the potential home buyers in the United States are Veterans or are married to one. This makes them eligible to purchase homes with VA loans currently at $417,000 with zero down.  Yet only about 5% of home purchases are made using VA financing. This discrepancy is partially due to the many myths that exist about VA home loans. Here are some of the myths that prevent greater usage of the VA home loan program:

MYTH: The Veteran's eligibility expires if he does not use it within a certain time frame.
Truth: The Veteran's eligibility never expires. Once they have earned the right to purchase a home by serving their country, the eligibility never expires and it actually increases as time goes on. VA eligibility has been tied to FNMA/FHLMC conventional loan limits since December of 2004, which, in turn, is tied to housing costs which generally increase each year. Increases in eligibility are retroactive. The current loan guaranty is $104,250. Most VA lenders will loan four times the loan guaranty with zero down, which equals $41 7,000. If the Veteran has never used his eligibility, he would be entitled to the full amount.
 
MYTH: The Veteran may only use his VA loan eligibility one time.
Truth: There is no limit to how many times a Veteran uses his eligibility. Once the V A loan has been paid off, the eligibility used on that loan is restored to the Veteran. Increases in eligibility over time are retroactive and may be used to purchase homes as well.

MYTH: A Veteran may only have one VA loan at a time.
Truth: A Veteran may have more than one VA loan simultaneously, due to the retroactive increases in eligibility which will now likely increase yearly, as they are tied to housing prices.

MYTH: Sellers are required to pay discount points on VA loans.
Truth: Sellers very often had to pay discount points to give the lender the same yield on VA loans as conventional loans, as the VA interest rate was often lower than conventional rates. This ceased in 1992, when VA quit setting the VA interest rate. Today the seller is not required to pay any discount points on VA loans.

MYTH: VA loans take forever to close.
Truth: VA loans can be closed as fast as any other type of financing, if the Veteran has his certificate of eligibility and uses a lender that does a large volume of V A loans. Many lenders want to be able to say that they have a complete product line to include V A financing, but rarely do V A loans and as such, are very slow closing these loans because of unfamiliarity with V A procedures.

MYTH: VA loans are only for nothing down loans or lower priced homes.
Truth: While the present loan amount is limited to $417,000 with zero down by most VA lenders, many will take a down payment equal to 25% of the sales price over the $417,000. This makes the Veteran's down payment only 4% on a $500,000 home, 7.6% down on a $600,000 home and 10% down on a $700,000 home. These down payments are not only competitive with conventional financing, but the interest rate cannot change and can be assumed by Veterans or non-Veterans at the original rate for the entire 30 years. This feature can make the house easier to sell.

MYTH: VA loans are not available everywhere and they are not flexible on the type of property to be purchased.
Truth: VA loans are available nationwide, but many banks do not like to do them. A Veteran's best bet is to locate a mortgage company that does V A loans. Three huge lenders that operate in every state and specialize in V A loans are: Wells Fargo Mortgage, Countrywide Home Loans and American Home. V A is very flexible on the type of property that the Veteran wants to purchase. For example, they allow Veterans to purchase rural properties with large acreage as long as the Veteran will live on the property as his primary residence.

MYTH: To be eligible for VA loans, the Veteran must have served in the regular military and reached a rank of Sergeant or higher.
Truth: The Veteran may have served in the regular military or any reserve component and there is no requirement regarding rank. He or she just needs to complete the required time satisfactorily.

How can I get a free list of bank owned homes I can buy with my VA loan?

As we want to help you locate lovely bank owned homes, we grant you FREE access to our exclusive list of Foreclosed Homes in the Houston metropolitan area. This list will readily update you on the latest  foreclosed homes available for sale.

In order to gain access to our Foreclosed Homes Lists, please go to:

www.HoustonAreaBankOwnedHomes.info

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