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The state of Washington is home to many active-duty military members and veterans. Because of this, there are many residents who could benefit from using Washington VA loans when buying a house.
Unfortunately, surveys have shown there are many myths, misconceptions and misunderstandings surrounding VA loans. Some people who are well-qualified for the VA loan program, and could benefit from it, might be reluctant to apply due to misinformation.
As a Washington-based mortgage company that specializes in VA loans, we do our best to educate military members and veterans about their mortgage-related benefits. So today, we will “debunk” seven of the most common myths about Washington VA loans.
VA loans take a long time to close. I need excellent credit to qualify for the program. I can only use it once, and after that, my benefit expires. I have to save up for a down payment.
These are just a few common misconceptions about the VA Home Loan Guaranty Program. So, let’s tackle them one at a time.
Some home buyers in Washington using VA loans choose to make a down payment to reduce the size of their monthly mortgage payments. But in most cases, the down payment for a VA loan is entirely optional.
This program allows you to finance up to 100% of the purchase price, eliminating what is usually the biggest obstacle to homeownership.
Past surveys have shown that many military members and veterans think a VA loan down payment is required. This is one of the only mortgage programs available to home buyers in Washington that allows for no down payment.
You don’t need an excellent credit score to qualify for a VA loan in the state of Washington. Borrowers with credit-related issues in the past can often qualify for this program, even if they’ve been turned away for a conventional mortgage.
The VA loan program has some of the most flexible and “forgiving” qualification criteria of any mortgage program available today. So you shouldn’t feel disqualified just because of a few dings on your credit report. Apply for the VA loan program to find out where you stand.
The federal government gives mortgage lenders a partial guarantee that protects them from scenarios where a borrower cannot repay the loan. Because of these protections, mortgage lenders typically allow lower credit scores for Washington VA loans when compared to traditional or conventional mortgage products.
As it states on the VA.gov website:
“VA Loans are more lenient than conventional regarding your credit history. In fact, VA has no credit limit, though it is true that VA lenders generally look for a 620 FICO score, which, in layman’s terms, means “Fair” credit (followed by “Good” and then “Excellent”). Conventional loans often require a 660 minimum credit score, although you may need more like a 740 to have a shot at the best rates and terms.”
Another common myth relating to VA loans in Washington concerns the VA loan closing process. Some people think that VA-guaranteed mortgage loans take a lot longer to close when compared to conventional financing or that they are more likely to “fall through.”
However, previous studies have shown that VA loans have a higher closing success rate when compared to FHA and conventional mortgages. This means borrowers who use the VA loan program to buy a house in Washington are statistically more likely to reach the final closing and receive funding.
On average, VA loans take a few days longer to close compared to conventional mortgages. But the difference is so slight that it’s hardly worth mentioning, especially considering the many benefits this program offers borrowers.
There is a widespread misconception that Washington VA loans have strict VA loan requirements for home inspections that determine that expensive repairs are necessary. But this is another departure from reality.
In fact, the Department of Veterans Affairs does not require a comprehensive home inspection for properties purchased with a VA loan. They do require an appraisal, and it has a basic inspection component built into it. But even in this case, the appraiser is primarily concerned with severe health and safety issues.
If a particular house is well maintained, move-in ready, and does not need significant repairs, it will likely qualify for VA loan financing. Many, if not most, of the homes currently for sale in Washington fall into this category and, therefore, would not present any issues for the borrower.
But you shouldn’t use this program to purchase a fixer-upper that needs serious work. VA loans are not well suited for this purpose.
If you use a VA loan to buy a house in the state of Washington and then later sell the home and pay off your mortgage debt, you can use the program again. Some homeowners have used VA loans over and over again throughout the years for this very reason.
It’s a myth that you can only use a VA loan once. You can use it as often as you like if you restore your entitlement by repaying the previous loan. Repeat use is one of the many benefits of the VA home loan program.
As mentioned above, VA mortgage loans are backed by the federal government via the U.S. Department of Veterans Affairs. However, the VA does not lend money directly to home buyers. They simply act as the backing agency, reducing some of the risk for mortgage lenders.
The actual funding will come from the lender, the same as most other types of mortgage loans. So, when you apply for a VA loan in Washington, you will submit your application through a lender in the private sector.
The only interaction you’ll have with the VA is when you request your Certificate of Eligibility, an essential prerequisite for this program.
The Department of Veterans Affairs allows borrowers to use a VA loan to purchase a multifamily property, such as a duplex or triplex. But the caveat here is that one of the units must serve as your primary residence.
Most borrowers who use this program end up purchasing a traditional single-family home. But you could also use it to buy an approved multifamily property. This allows borrowers to live in one unit and rent out the others, creating an additional income stream.
Washington VA loans offer several compelling benefits you won’t find with other mortgage products. But this program also has its share of myths, misconceptions, and misinformation. We hope this article has helped to dispel some of these common myths while giving you the information you need to succeed!
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.