Danny Salas

VA…The BEST Loan In The Industry! “Generally” Speaking

The General Loan...VA

VA:  The “General” Loan

Where else can you obtain 100% financing without mortgage insurance…with ONE loan?  Well, USDA, loans, but…OTHER THAN THAT?  NOWHERE!  That’s right…VA Loans enable a veteran to obtain 100% financing, have the seller pay most bank fees, and also have the seller credit 4% of the sales price toward other closing costs and prepaid items like taxes and homeowner’s insurance.   In most cases, the VA buyer can move into the home with almost nothing down.  AND NOT HAVE A PAYMENT FOR UP TO ALMOST TWO MONTHS!  You just cannot do any better than VA Loans…they’re the best.  So, in a previous article, I may have mentioned that FHA is King; VA must be “The General Loan.”  I like that…”VA…The General Loan.”  Coin that!

Getting In With No Money

Let’s give an example…VA allows a veteran to put nothing down…0%!  So, automatically, we’re at 100% financing.  Then, over and above that, they allow a seller to credit up to 4% of the sales price, towards a buyer’s closing costs and impound account.  Even more desirable, the veteran is NOT allowed to pay many fees that most borrowers do have to pay.

The Critical Offer

When writing an offer, make sure you understand that the buyer is NOT allowed to pay certain fees.  Really, the only fees a veteran may pay is an origination fee, reasonable discount fees (to buy the rate down), credit report, flood certificate, appraisal, and title fees.  Any other “bank fees,” must be paid for by the seller.  So, if your lender has a tax service fee, a processing fee, an administration fee, an underwriting fee, or any other “bank fee,” prepare to have the seller pay for these fees.

Title And Escrow Fees Can Be Sticky

Also, keep in mind that there are VA guidelines regarding title and escrow:  Escrow must be paid for, by the seller.  Also, depending on how the contract is written, you may be able to have the seller pay all title fees, as well.  What I mean by that is VA’s guidelines state that title is to be paid according to “what is typical for the area.”  So, in Butte County, we generally structure the buyer and seller paying 50% of the CLTA Title Policy.  We generally structure that the buyer will pay the ALTA Title Insurance Policy.  However, if you write the contract to state that seller is to pay CLTA and ALTA Title insurance policies, than you free up more of the 4% seller credit funds that can go toward the buyer’s impound account and other costs.  Most VA underwriters don’t happen to live in the actual county that the contract is being written.  Therefore, what is typical for the area, is generally passed along as to what is written in the contract.

VA Rank

So, VA is a four-star loan.  The General Loan.  Feel free to call me when writing a VA contract.  We can go over the particulars, together.

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This entry was posted on Tuesday, October 13th, 2009 at 7:20 am and is filed under Chico Home Loans, Home Buying, Loan Qualification, Mortgage Industry Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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