Among the variety of loan choices for hopeful home buyers, a good bet could be a VA loan for current and former service members in good standing. But some may not know the ins and outs of a VA loan, so we thought we’d highlight some VA loan features.
To do so, we contacted our friend Eric Boutcher, team loan officer at Atlantic Coast Mortgage LLC, to fill us in on how a VA loan might be different from a conventional one, clue us in to some of its benefits, and even resolve some misconceptions.
“The biggest difference is that VA financing allows for 100 percent financing and does not require mortgage insurance,” Eric said. “This is a huge advantage for eligible veterans on both fronts.” But that’s not it. When we contacted him, VA loan interest rates were lower than conventional loan rates. Eric noted that there is a funding fee, (which can be rolled into the loan), but a VA loan is tremendously cost effective because of its low rates and no mortgage insurance requirement.
Still, there is some misunderstanding about the loans. “A lot of people have a misconception that VA loans are more difficult to obtain than conventional loans, and this is simply not accurate,” Eric said. “While you must be an eligible veteran, VA loans have more flexible guidelines in many regards than loan programs offered through Fannie Mae and Freddie Mac.” He also said that some people think that VA loans take a long time to close, but as a fully delegated VA lender, Atlantic Coast Mortgage processes and underwrites VA loans right in their office. This allows Eric to typically close a VA loan in about 21 days.
Other differences to keep in mind include the fact that the appraiser will be a VA appraiser. “VA financing is very particular about health and safety issues, which can result in VA appraisers requiring issues to be addressed before closing,” Eric said. “The most common things I see flagged in VA appraisals are missing handrails on staircases and peeling paint.”
Of course, many of these, he said, are quick fixes, but it’s something a VA loan home buyer might keep in mind. Ultimately, it’s about the well being of the buyer in the eyes of the VA.
If interested in a VA loan, Eric said the first step is to contact him and complete an online loan application, which takes about 10 minutes. Once submitted, the process of gathering supporting documentation begins. “Even if a client is not under contract yet, it is still important to review this information upfront,” Eric said. After buyers have a ratified contract, he said the process is similar to that of a conventional loan.
If you want to explore your VA loan options, don’t hesitate to reach out to Eric and find out what you might be able to afford. It’s a tremendous benefit for veterans and a great path to home ownership.
Christopher Prawdzik is a certified Military Relocation Professional.