Nine Myths About VA Loans

The VA loan is an exceptional product that is available to United States military veterans. However, the VA loan benefit comes with a lot of confusion and stigma. If you are a veteran of the United States armed forces, chances are you might believe one of these nine myths about VA loans. I’m going to set the record straight.

Your Benefits Expire – FALSE

In 1944, the VA Mortgage program was a provision of the Serviceman’s Readjustment Act, and at that time the VA loan WAS a one time use with a 10 year expiration. This isn’t the case anymore. You can use your VA loan benefit any time.

You Can Only Use Your Benefits Once – FALSE

Like I mentioned above, back in 1944, the VA loan was a one time benefit. This has changed though, and you can reuse your benefit over and over. You simply need to get your entitlement restored by applying for restoration.

You Can Only Have One At A Time – FALSE

You can buy more than one home using the VA loan as long as you haven’t used all of your entitlement.

There Is A Limit To The Size Of A VA Loan – FALSE

There is a no limit to the amount of the loan, but there is a limit to your entitlement. If you have additional money to put down, you can buy a more expensive home.

You Cannot Have Another VA Loan After A Foreclosure – FALSE

The VA does not state that they cannot or will not guarantee a loan for a veteran that has foreclosed on a previous home. They only require that a lender do a thorough risk analysis and determine there is no risk of a future foreclosure. Lending institutions vary on how long you may have to wait to buy a new home, but you can use your VA benefit again.

I Have To Wait To Get A VA Loan After A Short Sale – FALSE

Like above, the VA does not have any policies that restrict benefits to veterans that have sold their previous home in a short sale. Just like with foreclosures, the lending institution will need to analyze the risk, and they all have different waiting periods.

VA Appraisals Are Too Restrictive – FALSE

A VA appraisal is just like any other appraisal.

VA loans Are Too Expensive – FALSE

In actuality, buyer fees and origination costs are much lower than other loan types. In fact, in most states (like Texas), the non-allowables (such as who pays for the termite inspection) you may have heard about in the past no longer exist.

I owe all of the above knowledge to an amazing veteran and VA loan officer, David Smith of BBMC Mortgage. Just because someone is a mortgage lender does not mean they completely understand the VA benefit. As a Certified Agent with the Veterans Association for Homeowners, I have the education and skills to help you get the most from your benefits. When you’re ready to use your entitlement to buy your next home, make sure that you use a knowledgeable lender and REALTOR®. Please post your questions in the comments below, and I’ll be sure to get you the answers that you need.