Buyers eligible for a VA Loan Need Agents Experienced in VA Financing - Near Camp Pendleton CA, Twentynine Palms MCAGGC, MCRD San Diego Military Bases

VA Loan Buyers Need Real Estate Agents Experienced in VA Financing - Near Camp Pendleton CA, Twentynine Palms MCAGGC, MCRD San Diego Military Bases

If you have any questions, please call direct 951-704-4559 or visit www.SandToSeaProperties.com

The VA loan benefit is significant for those buyers who qualify for it, veterans, etc.  It is 100% financing for the VA buyer, and now in 2010 the only 100% financing opportunity besides the USDA loan for certain homes in rural areas.  Things for real estate agents and buyers to know about the VA loan:

1.  The VA insures the lender who makes a VA loan; the VA itself does not make the loan.  The VA charges a Funding Fee that is paid to the VA for insuring the VA loan: 2.15% of the purchase price for first-time users, 3.3% for second or more uses of the VA loan benefit, and reduced amounts for putting money down.  And, for veterans with a disability rating from the VA, the buyer can usually pay Zero funding fee simply by filling out the appropriate paperwork (your knowledgeable VA lender will provide this to you!).  As an example, the 2.15% funding fee on a $200,000 purchase price is $4300.

2.  To insure the VA loan, the VA requires that the loan package include a long list of items, such as the veteran's Certificate of Eligibility (your lender will pull this for you).  In addition, the VA disallows certain things from being part of the loan, such as certain usual buyer costs that cannot be charged to the VA borrower.  These costs are called Nonallowables.

3.  When writing up your offer to purchase a home using a VA loan, it has to be done using certain language describing the Nonallowables, or else it might threaten the purchase transaction.  As an aside, most transactions involve some kind of issue/threat/turbulence.  Reducing the number of threats increases the buyer's chance of closing on the home they have chosen.  

Here is an example: an agent writes up an offer saying there will be no seller credit, because the buyer knows the seller doesn't want to give a credit, and the buyer has decided he wants to pay cash for his closing costs.  The agents don't know the repercussions, and escrow is opened a few days later.  The buyer's lender finally gets the paperwork from everybody and reads the contract showing no seller credit.  Yet there are well over $3000 worth of costs that are Nonallowable for the buyer to pay in VA loan (certain title, escrow, processing, etc. charges.  This can be well over $4000 for certain Freddie Mac homes whose boilerplate contracts put all title and escrow costs on the buyer! 

So, in our example, the buyer cannot pay those costs, and the VA loan won't fund unless those costs are paid.  The parties now have to negotiate over whether the seller will pay the Nonallowables, or perhaps the agents will credit from their commissions.  It may get resolved, but it may not if the numbers are too tight.  This causes stress that could have been avoided by an agent who got sufficient training about the VA loan prior to starting the buyer's transaction.

The whole threatening issue can be avoided by making sure the purchase offer includes language for a seller credit of enough money toward Buyer's recurring and non-recurring closing costs and Nonallowables.  Certain other language may be added; in California, this language is inserted in the appropriate text block of page 1 of the Residential Purchase Agreement (RPA).  Check with the professionals in your state.

These are just some of the hurdles involved in a VA loan.  Knowing the details up front, your experienced VA loan officer and real estate agent decrease the threats to your VA loan purchase transaction.

If you have any questions, please call direct 951-704-4559 or visit www.SandToSeaProperties.com

 

Lisa Delzompo (951-704-4559)

"May your home always be too small ... to hold all your friends!"

Is your home getting too small?  Need a FREE Home Valuation?  Preparing to Sell a Home?  Click here to submit a form online, or Call Frank at 951-326-7330 for a free consultation.

CA Dept of Real Estate, Real Estate Broker License #01379811;

NMLS Identifer #331744

REAL ESTATE:  www.SandToSeaProperties.com.  Covering northern San Diego, Oceanside, Temecula, Murrieta, Riverside County and desert areas of Yucca Valley, Joshua Tree and Twentynine Palms, CA.

LOANS:  PRW Lending, Inc. Call direct 951-704-4559, or email me at lisa(@)sand2sea.us  

 

 

 

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Information is deemed reliable but is not guaranteed. Information is general and may not address your particular situation.  Do not rely solely on this or any information you find on the internet.  You should consult relevant professionals directly about your real estate, financial, etc., situation. 

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Comment balloon 0 commentsLisa Delzompo 951-704-4559 • January 24 2010 04:37PM
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