What You Need to Know About VA Loans for Virginia Beach, VA Real Estate
This may be the last 100% financing option for Virginia Beach, Chesapeake, and Hampton Roads real estate home and condo buyers.
Just a few years ago during the “sellers market” VA loans were not in vogue and not recommended by anyone….the other hybrid mortgages were the choice of those days. Not so now, as Veterans are quickly realizing the benefit of the little or zero down payment and a fixed rate for a real estate purchase.
VA loans are guaranteed by the Federal Government and are available through most local lending institutions throughout the United States.
Active duty and honorably discharged veterans are eligible for a VA loan. Also, those who have completed a
total of six years of service in the National Guard or selected reserves are eligible. Check with the VA for eligibility if you are a surviving spouse of a veteran.
What is the loan limit? $417,000 in most areas of the country but some regions may be higher.
With the rumored demise of the Navy Federal 100% financing, VA loans will be more in demand.
One of the great things about VA loans is no private mortgage insurance which most lenders require for loans with down payments of less than 20 percent. Sellers can contribute 3 to 4 percent closing and administrative costs required as part of the loan and include it in the real estate purchase price which adds to the value of the VA product. Of course VA real estate loans require the owner
occupy the Virginia Beach, Chesapeake, or Hampton Roads home or condo.
As with any Government program, VA loans normally take more time than other conventional products. This used to frustrate real estate buyers and loan officers because of more documentation, appraisal and inspections, but with today’s real estate market in Virginia Beach and elsewhere that pain has subsided. They are just glad to have the loan/mortgage business.
No doubt this process may require more time but the end result of a little or down, fixed rate mortgage makes it a very desirable product. Make sure your “ducks” are in a row prior to applying
for a VA loan by obtaining your certificate of eligibility prior to completing a Virginia Beach real estate purchase agreement and your REALTOR® has researched the ‘comps” to make sure your sales price is in line with other sold or pending homes in the same area.
VA Loan 101 real estate process for successful Virginia Beach real estate purchase:
1. Get your certificate of eligibility from the VA. Submit VA form 26-1880 along with proof of your military service to the VA. If you need help contact your REALTOR® or local DAV for assistance.
2. You and your REALTOR® search for the perfect Virginia Beach real estate home or condo and prepare and sign a purchase agreement. The real estate purchase agreement is needed for a specific home or condo.
3. Get your VA eligibility certificate to a lender/mortgage officer and fill out an application. The
lender will verify you’re application information and request a copy of your
credit report/score. If you have a lower credit score you still may be ok. It is not the primary item for a VA loan. If you have the income for monthly payments (plus taxes) you can be approved.
4. VA home loans are a very good deal. You should also check with your State of
residence as they may have special incentives.
5. Remember, the lender will require an appraisal. The VA will assign this person
to ascertain value of the real estate you intend to purchase. Condition and recent selling sold/pending prices of comparable homes in your particular area will most likely determine the appraisal value.
6. There is a funding fee with VA loans. The funding fee varies with the particular veteran. (disabled veterans get a big break). It can vary depending on size of your down payment, and whether you are financing for the first, second, or if a “refi”. Sellers can pay part of the fees as part of the purchase price and contract. Otherwise it will be included in the closing documents.
A good way to off-set this funding fee is using the Military Movers Plus Program
for Virginia Beach, Chesapeake, and Hampton Roads real estate purchases.
7. Your Loan approval. Assuming your income and credit score are acceptable and the home is appraised in value to your negotiated purchase price you should be ok.
8. You are near the end – closing. During this time you will sign documents before taking possession of your new Virginia Beach, Chesapeake, or Hampton Roads real estate. During closing all parties will sign the
mortgage note or deed of trust plus a myriad of other paperwork. Read more about your costs associated with closing.
9. How the VA guarantees your loan: Upon completion of a successful closing,
the loan documentation is sent to the VA. The VA will then return your certificate of eligibility indicating you
have used your VA entitlement.
Check with your lender or the VA if considering a VA refinance or rate reduction.
