The MILITARY Advantage from
The MILITARY Advantage from
Step-by-Step Guide to Obtaining Your VA Loan Benefit
There’s a lot that is less than fantastic about military life. Missed birthdays and anniversaries. Worry during deployments. Picking up and moving time and again. But there are also perks to military life. One of those perks is the VA Loan Benefit. What’s not to like about a 0% down loan with no mandatory private mortgage insurance (PMI) and often with lower rates than a conventional loan? If you are eligible for this benefit, it’s one you should take advantage of.
Keep in mind: While it’s called a VA Loan Benefit, the VA does not provide home loans. What the VA does is act as the security of the loan, meaning the VA guarantees to cover the bank’s losses if there’s a default on the mortgage. This is added peace of mind for lenders!
Do you qualify? Did you or your spouse serve on active duty during wartime for 90 consecutive days? Or serve on active duty during peacetime for 181 days? Or serve in the National Guard or Reserves for six years? Were you or your spouse discharged from the service under honorable conditions? Or are you the spouse of a service member who died in the line of duty or as a result of a service-related injury or disability? If you can respond with “yes” to one or more of these requirements, you should be eligible.
Prove you’re eligible. You’ll need to obtain a Certificate of Eligibility (COE) to establish that you are indeed eligible for a VA Loan. You can do this yourself by completing a Certificate of Eligibility Request Form (VA Form 261880). Sign onto ebenefits.va.gov with your CAC card (ID card) to complete this form. This part of the process will require you to create an eBenefits account if you don’t already have one, or to login with existing credentials. Once on the site, click on the link entitled “Certificate of Eligibility for a Home Loan” and follow the instructions. Make sure to print out at least two copies of the COE—one for your own records and one for your mortgage lender.
Any questions or technical issues? You can contact VA/DoD at 1-800-983-0937. You can also ask your lender for assistance with obtaining your COE.
Speaking of lenders… While most lenders can offer VA Loans, it is to your advantage to choose a lender who specializes in them. One of the advantages of working with a military-serving real estate agent is that he or she knows and works with lenders with experience and expertise navigating the VA Loan program. This means smoother sailing for you!
Get your other documentation in order. You’re no stranger to needing documentation. Here’s where you’ll want to ensure you’re tracking which documents you’ll need: A DD-214 will verify an honorable discharge. You will also need to demonstrate that you have steady income sufficient to cover your mortgage payment and monthly expenses, so you’ll want to make sure you have your pay stubs or other proof of income readily available. While individual lender requirements may vary, you will likely be asked to produce bank statements, tax returns, W-2s, and orders (if you’re PCSing). Your lender will communicate any additional documentation that is necessary.
Pro tip: Put this information aside before you’re packing up if you’re in the middle of a move.
Once you’ve obtained your Certificate of Eligibility, put together your documentation, and assembled your dream team—an agent who is a pro at working with military families and a lender who’s comfortable with VA Loans—you’re ready to move forward with your home purchase. And in the process, you’ll be able to reap the financial rewards of a hard-earned benefit.
One of the biggest hurdles real estate agents face with connecting to the veteran and military population is a lack of understanding of the VA loan process.
In the next 5 minutes, you will learn about the Top 3 VA Loans Myths.
Myth 1: VA Loans Take Way Too Long To Close
Fact: VA Loans Close Just as Fast as Conventional Loans and Even Close More Frequently
There’s a lingering myth that loads of red tape cause VA Loans to close more slowly than conventional loans. This is simply not true.
According to national data collected by Ellie Mae, conventional loans closed in an average of 40 days while VA Loans closed in an average of 41 days.
Ken Robbins, Co-Founder of Millie, personally experienced this process just a few years ago. He was buying his current home with a VA loan as he was transitioning from the military. The home closed in just under 30 days.
Not only do VA Loans tend to close just as fast as conventional loans, but the Ellie Mae data also suggest that borrowers who take out VA Loans are actually more successful in closing than those who take out conventional loans. Typically, 68% of VA Loans closed while only 49% of conventional loans closed.
Myth 2: VA Loans are More Risky Than Conventional Loans
Fact: VA Loans Have Been The Safest On the Market Since The Housing Crash of ‘08
VA Loans’ competitive interest rates and $0 down payments often leave people thinking, “What’s the catch?” Many assume that VA Loans are more risky because they come with so many benefits. The fact of the matter is: VA Loans have had the lowest foreclosure rates of any type of mortgage for the last seven years, according to the National Delinquency Survey.
This is something we have seen SO many times. A realtor on the selling side will tell their client to turn down an offer from a buyer using a VA loan despite the offer being for MORE MONEY than the conventional loan buyer. Thus, they just cost their seller money. The amount of money for a down payment is not an indicator of the strength of the buyer in all cases.
Myth 3: The VA Appraisals Tend to Be Conservative and Undervalue Homes
Fact: All Appraisals Cause Differences of Opinion, and VA Appraisals Are No Different
VA appraisals have developed a bad reputation for undervaluing homes, but no data suggest that these appraisals over more conservative estimates than conventional appraisals. Rather, it seems as if difference of opinion about property value is just a common phenomenon that affects all types of loans.
A 2012 study from the National Association of Realtors showed that 1 in 3 real estate transactions had problems because of an appraisal.
The VA appraisal process, like all other appraisal processes, is influenced by subjective judgments and statistics from supposedly comparable homes that might not offer good market information.
In Ken’s experience, he rarely saw VA appraisals differ significantly from others. When he and his wife bought their home, the VA appraisal was ABOVE their purchase price, meaning they gained instant equity in the home.
The appraisal was done efficiently and they missed no closing deadlines as a result.
If you need an agent that understands the VA Loan Process and can help with your real estate needs please feel free to reach out to me at your convenience at 702-815-9478, or RobertK@bhhsnv.com
I Pledge to Serve Those Who Have Served
Every real estate agent has a responsibility to provide the best home buying experience and resources available to his or her clients. That’s why I’ve pledged to ask every client “Did You Serve?” As a Veteran, you are eligible for many benefits earned through your service, among them is the advantages of the VA Home Loan program. It’s my privilege to educate you on these home buying benefits and to help make those benefits accessible and attainable.