VA Loan vs. Conventional Loans: Comparing the Benefits

What's going on everyone today I'm covering a critical topic talking about VA loans versus conventional loans. Why we're doing this is because we still get a lot of veterans that get steered away from using their VA home loan benefits. Does it always make sense to let's say 100% use your VA home loan? Definitely not because there's different scenarios you could be in that could dictate that. So I'm going to cover a couple of those today as well just kind of give you an overview. As you guys have been following the channel you know that there's a lot of benefits to using the VA home loan and since you can use it multiple times and have multiple VA home loans it makes it a good option. But there's also conventional loans because a lot of people right now may have really low interest rates on their VA home loan and let's say all their entitlements locked in. Well if they rent it they can make some extra money to offset the new mortgage but you need to really understand where those benefits come from on let's say a conventional loan and what those programs look like. Not long ago we did one on FHA loans versus V loan. Definitely you should be looking at a V loan unless you're really looking at maybe trying to have multiple properties looking at multifamily then you can kind of stagger the products accordingly. But again that's going to be based on your individual situation and I encourage you if you're thinking about doing things like this and this video interests you and you're thinking about homeownership please schedule a call with us down below. So I'm going to break down the conventional component to this. Now interest rates on these programs are primarily driven by your credit score. It's going to be a pretty hard and fast debt to income ratio. The type of property you're purchasing it. It could be a single family home multifamily property. They offer renovation programs which are a bit more flexible than the government program. So you know it might depend on your individual situation for that and always remember you can refinance into a V loan from another product and again it's going to really depend on how you leverage it. Conventional loans also offer special programs for first-time homebuyers like a HomeReady and HomePossible. They're based on a Fannie Mae and Freddie Mac. Two different requirements and you can do as little as three percent down all the way on up as much as you'd like. Now these loan conventional loans are also based on single family loan limit for a single family. They have two three and four unit properties and it just depends on where you're buying in the country. It's going to be a little bit different. The same thing is going to go for those first-time homebuyer programs which offer typically lower interest rates and a reduced private mortgage insurance which is a pretty big benefit. Unlike a V loan where you don't have private mortgage insurance you do have a VA funding fee you have to pay unless you're collecting a 10 percent or higher disability rating and then you don't have to pay the VA funding fee. But it does change based on how many times you use the program itself which is going to make a big difference for how you're going to look at the overall transaction. Now a lot of times what we're seeing when people go and make offers on properties and if you've felt this before or you feel like hey this has been happening to me drop a comment down below because I want to share with the veteran community some of the I would say the the shortcomings when making offers and using a V loan right now this is not real this is really like what people have portrayed V loans to be really bad or people that have no money use V home loans. Listen guys it's a benefit so use the program but surround yourself with a team that can walk you through this right they know how to make the offers because again ton of myths around it especially when it comes to hey it takes forever to close a V home no it does not it is pretty quick and I would say it's pretty on par with a conventional loan you know let's say just on average you're talking about you know 25 days or so to close on a VA loan in a normal circumstance and conventional loans are not too far off of that right another big thing is that the VA appraisals are very strict and it's harder to buy a home now I would say that before maybe that could be that could be true I now the VA officially came out and said look if veterans want to do the repairs to the property themselves and it's not a safety concern then they can buy it and basically you know I'm not an attorney here but they can do an escrow hold back and they can then do the repairs after they close making it way more competitive right they've opened up like saying that termite inspections can now be paid for by a buyer again another opportunity all condos our condos can't get waivers so you even if a condo is denied from the VA you could still purchase in it right huge benefits with the program they've opened it up to make it more competitive and then the other month they came out with you veterans can now pay realtors real estate commission fees because all the laws have changed so they're trying to make it up make it up for that now how you can be a little bit more competitive when making a home offer you don't have to put a down payment like that doesn't make a difference and for the people that are maybe out there real estate professionals watching this video remember if somebody's qualified to purchase the property no matter if it's zero money down or 50% down they still are qualified to purchase the property so don't get steered away from using your VA home loan it is a phenomenal product to use but there's a lot of things you do have to be careful about you know some of these lending institutions do charge high fees like origination fees and discount points where you could have gotten it cheaper somewhere else and again we're happy to go through that with you so you can really maximize what you're trying to do financially for you and or your family because we all know that things right now aren't exactly easy and cost of everything has gone up so you could save some money by at least looking at some different options and with that we won't write no down payment versus a conventional minimum three percent down payment plus you're paying that additional private mortgage the private mortgage insurance or the VA loan you don't have that and just remember if you do get charged a VA funding fee and you have a claim that's pending but you still haven't gotten it you close on the VA loan you get hit with the VA funding fee but later after you've been awarded your disability compensation as long as it's backdated or its effective date is prior to closing on your mortgage you can reach out to the VA to get a refund of that VA funding fee so it's another big bonus of using that especially if you're going through that process now if you're trying to I would say for all the people and we're going to do some actually videos around specifically how to build let's say a real estate empire using different loan programs you know because if you're going into this saying like well I'm going to purchase you know I have I have cash in the bank I got I got good credit you know going into buying multiple properties doesn't make sense to just off the bat say hey I'm using my VA loan buying a four unit building I'm going to cash flow it and then I'm going to turn around and purchase another property well depending if you've exhausted your benefits now you've purchased a 25% down payment on any additional VA loans versus saying well hey let me do potentially like a five percent multifamily conventional loan hey I PCS buy a multi by a FHA multifamily then I go into a VA loan so in theory you can line it up to technically you know if you buy three four unit buildings with the minimum amount down but again it's all going to depend on your financial situation it's really individual to you so never disqualify yourself please schedule a call with us and share our videos with the veteran community so we can get information like this out to the people make sure you guys hit that like and subscribe button and I'll catch you guys soon