VA loans tend to get a bad rap. Many buyers, realtors, and even some lenders, consider them to be confusing and unattractive to sellers. We’re here to dispel some of these VA Loan misconceptions and set the record straight.

  • What We Hear: VA Loans are not competitive in a hot market like Colorado, when compared to a cash offer or other type of loan.

    • The Reality: There are many benefits within a VA loan that will make it competitive, even up against a cash offer or another type of loan. We highlight these benefits, such as no Private Mortgage Insurance (PMI), lower interest rates than other programs, straightforward qualifying without risk of being disapproved for a loan, appraisal timeliness, and 0$ down payment up to loan limits, with full entitlement. We closed 357 VA loans in 2020, nearly half of our total mortgage volume for the year. Our loan officers have extensive experience with relocation and PCS transfers from all over the world; we recently helped a soldier in Germany who closed while still overseas — without ever seeing the house here in the Springs.
  • What We Hear: Sellers think VA loans are a hassle.

    • The Reality: Some sellers have the misconception that a VA appraisal takes too long to come through and that the appraisers tend to be picky about condition of the property. This isn’t necessarily true. At CB&T Mortgage we see appraisals come through in ten business days, which is standard turnaround for any loan type. Additionally, the “pickiness” of the appraisal is not dependent on the loan type, it is usually dependent on the Appraiser assessing the property.
  • What We Hear: I can only use my VA eligibility once.

    • The Reality: A Veteran can potentially use his/her VA Eligibility more than once. A few examples include:
      • If a Veteran didn’t use their VA Eligibility on their first home, they can use it on the next home they purchase
      • If a veteran pays off their VA loan in full, they get their VA Eligibility back, enabling them to use the eligibility on their next home
      • If a Veteran wants to buy another home without selling the home that was purchased using VA Eligibility
  • What We Hear: You can only use a VA loan if you’re an actual Veteran.

    • The Reality: VA Eligibility extends to active military personnel, as well as the spouses of veterans and active military. If a military spouse is currently deployed, the spouse back home is still able to move forward with a VA loan. With our home office located in Colorado Springs, and five military bases only a few miles away, CB&T Mortgage is very familiar with VA loans and helping veteran and active duty families successfully purchase homes.
  • What We Hear: The assumability of a VA loan isn’t that beneficial.

    • The Reality: Conventional loans are not assumable. VA loans (as well as FHA) can be assumable loans. An assumable loan means that a person can take over your loan, while keeping the original interest rate. For example, if rates were to go up to 7% in two years, and you have a VA loan with a 3% rate, your buyer can assume your loan, release you from liability, and keep your low interest rate. With interest rates currently low, this is not a very big deal; however if interest rates rise, assumability makes our VA loans more competitive in a hot market.
  • What We Hear: VA Interest Rates are the same no matter the lender.

    • The Reality: The lender is the one who sets the interest rate- not the VA or government. Therefore, VA rates may vary from one lender to another. At CB&T Mortgage we are very aggressive with our VA interest rates, and Veterans who work with us tend to get 6% more home than with a competing lender.
  • What We Hear: The VA funding fee is keeping me from going through with a VA loan.

    • The Reality: There are many cases that might make you eligible for no funding fee:
      • If you are currently receiving VA compensation for a service-connected disability or
      • If you are eligible for VA compensation because of a service-connected disability but are instead receiving retirement or active duty pay instead or
      • If a veteran has passed away while serving or from a service-connected disability and the surviving spouse is receiving Dependency and Indemnity Compensation (DIC) or
      • If you are a service member with a proposed or memorandum rating, before the loan closing date, saying that you’re eligible to get compensation because of a pre-discharge claim or
      • If you are a service member on active duty who, before or on the loan closing date, provides evidence of having received the Purple Heart
      • You may be eligible for a refund of the VA funding fee if you’re later awarded VA compensation for a service-connected disability. The effective date of your VA compensation must be retroactive to before the date of your loan closing. Read more, here.

As with all loan types, there are several factors that are used to determine what loan type you should move forward with – Conventional, VA, FHA, etc.. However, if you’re a veteran or active military, and your lender isn’t first looking into a VA loan for your home purchase, you might be missing out. Contact one of our CB&T Mortgage Lenders today to learn more about VA loans and your purchase power.