VA Loans Offer a Lineup of Features

Veterans sometimes forget to mention their service in the nation's military branches and that could be an unfortunate, costly oversight in a quest to buy a home.

Veterans' Administration loans offer so many advantages that real estate professionals should ask every client if they have military service.

The biggest oversights are that VA loans can be used more than once — when the initial loan is repaid the veteran can apply again — and VA loans are fully assumable, which means the veteran has built in financing if a sale of the home is necessary.

“VA loans offer an impressive lineup of features,” said Dennis Geist, vice president of government programs at Well Fargo, and the keynote speaker at a recent seminar offered by the Southland Regional Association of Realtors. “It's essential that real estate professionals know their customers' profile, especially in today's market when simply asking the question 'Are you a veteran?' can make all the difference in the world.”

VA loans are designed to help veterans finance the purchase of or refinance a home with favorable loan terms and low interest rates.

Like FHA, the VA is not a lender but simply insures loans offered by VA-approved lenders.

In Los Angeles County the maximum VA loan with zero down payment — let's repeat that: zero down payment — is $737,500.

Loans above that total are available at favorable terms, but a down payment would be required, although what the VA calls a downpayment would be considered a gift by almost anyone.

For example, a purchase price of $1 million would require a downpayment of $65,625 — a measly 6.57 percent. Or, a veteran buying a home at $800,000 would have to come in with a 1.95 percent downpayment, which comes to all of $15,575.

Sweet.

In addition to zero or low downpayment, some of the other benefits of VA loans, and the list is quite lengthy, include: very attractive interest rates (Does a fixed-rate loan for $700,000 at 5 percent sound appealing?); no mortgage insurance required; no prepayment penalty; flexible credit standards (no minimum credit score up to $700,000); use of gift funds toward a downpayment is permissible; the seller can contribute up to 4 percent toward closing costs; VA loans are fully assumable, by veterans and nonveterans; VA eligibility can be used more than once; and two veterans can combine income and assets to buy a home together.

A very impressive lineup of features indeed!

The Southland Regional Association of Realtors is a local trade serving the San Fernando and Santa Clarita valleys. SRAR is one of the largest local associations in the nation.