VA loan is a great way to buy a home, if you qualify
Published 9:00 pm Saturday, May 18, 2002
Q: I am a veteran, 50 years old, and I wonder if I can still use my VA loan benefit. I have never used it before.
– W.S., Snohomish
A: The zero down loan program offered by the Veteran’s Administration is one of the best mortgage programs on the market today. In many cases, veterans are able to buy a home with literally no money out of their pocket because the sellers often pay the buyer’s closing costs. Typically, the sales price is raised enough to offset the amount of closing costs that the sellers are paying on the buyer’s behalf, so it’s a win-win deal for both sides. This is known as a double zero-down VA purchase.
Any qualified veteran of military service can use the VA loan program, no matter how long they have been out of the military. In fact, the VA loan program can be used over and over again, because the veteran’s eligibility is restored every time their old VA loan is paid off.
The minimum military service time needed to qualify for a VA loan varies, depending on when the veteran served. For example, a veteran can qualify for a VA loan with as little as 90 days of continuous active duty during wartime. But it takes up to two years of continuous active duty during peacetime for a veteran to qualify for a VA loan. Those who served in the Reserves or National Guard must have at least six years of service to qualify for the VA loan program. The qualification dates and required service times are quite specific, so veterans should contact the local office of Veteran’s Affairs Department to determine whether they qualify for a VA loan.
On average, VA loans have slightly higher interest rates than conventional 30-year fixed rate mortgages, but because of the generous income qualifying ratios under the VA loan program, veterans can borrow much more money with a VA loan than they could with a conventional loan. VA underwriters also tend to be a little bit more forgiving of credit dings than conventional underwriters.
When you combine the advantages of zero down payment, generous income qualifying guidelines and today’s low interest rates, this is a great way to for qualifying veterans to buy a home. The maximum VA loan amount is $240,000 in King and Snohomish counties, so contrary to some misconceptions, it is NOT just a program for low income areas. Anyone who has served enough time in the military to qualify for a VA loan should take a good look at this wonderful loan program.
One potential drawback to using a VA loan is that some sellers are reluctant to accept an offer from a VA buyer because there are additional closing costs that sellers must pay on VA deals. However, a knowledgeable real estate agent can usually work around this by increasing the sales price enough to offset the seller’s additional closing costs.
Also, you must use a VA appraiser, and that sometimes scares home sellers because they have heard horror stories about VA appraisers being very “picky” about the condition of a home compared to a conventional appraiser. But in my experience, those fears are greatly exaggerated.
VA appraisers tend to look for obvious property defects, such as a bad roof, peeling paint and/or water in the basement or crawl space. If a house is in good condition, it should pass a VA appraisal just as easily as it would pass a conventional appraisal. So don’t let these popular myths dissuade you from using the VA loan program.
Mail your real estate questions to Steve Tytler, The Herald, P.O. Box 930, Everett, WA 98206. Fax questions to Tytler at 425-339-3435, or e-mail him at
Steve Tytler is a licensed real estate broker and owner of Best Mortgage, Inc. You can visit the Best Mortage Web site at www.bestmortgage.com.
