NOT ALWAYS BEST VA Home Loan And Other Options For Veterans

Stop using the VA home loan. Why am I saying that? My name is David Piatek with VA housing education, where we focus on educating the military community and the real estate community about using VA home loan benefits, the advantages. If you guys haven't liked the video, please do so and subscribe to the channel to talk about content like this. So why am I saying stop using the VA home loan? It's something that I don't say, but it's something that I keep coming across when it comes to real estate transactions, right? I'm sure there's veterans out there that felt this frustration. They want to buy a home. They get a VA home loan pre-approval. They go out and then they don't get their contracts accepted. And I'll get questions from sellers, agents, listing agents all the time of like, well, they're using a VA home loan. And then they have all this list they go through. And I'm like, that is all misconception. So we're going to break that down. Why those things exist, some of the things that you can do to overcome them, especially with videos like this and other videos that we do, uh, make sure that you educate yourself first and that you're working with the right people. And I'm going to again, break all of that down. So let's go some of the common misconceptions around the VA home loan itself. The VA loan gets a bad rep when it comes to using the actual product because people have bad experiences, right? This could be sellers, realtors, even veterans have a bad experience and they might not recommend the VA home loan. And a lot of this information has been passed down through time because the product has evolved. It's gotten much better to where we are today, which I'm a huge fan of. Now I'm not saying the VA home loan is a hundred percent good for a hundred percent of the transactions, right? Sometimes it might make sense to go down a different route, but it's very circumstantial. I would say majority of the time, like 95% of the time, the VA home loan is a perfect loan option for a military member. Now the times where it really, you know, might not make sense is if you're trying to stack invest, you know, stack properties, you want to maximize, you know, how you can gain properties with as little money down as possible, right? That that's an option. Then we might look at an FHA or conventional loan based on the type of property you're purchasing. Maybe the condition that it's in, if you're trying to do renovation products, there's a lot that goes behind that. And that's why these things exist. Now, some of the misconceptions around, you know, there's a lot of misconceptions around the appraisal, what people know, how they look at it and the hassle that people experience when working with either certain lending institutions, which we're going to cover here in a little bit. All those exist around the of a property, for example, would be can't buy a property as is well. Yes, you can. And appraisal issues that come up, which we're going to break down here in a little bit are really have been mitigated by the VA with new VA circulars that come out. What sometimes is confusing is that all your benefits around the V home loan is public information. It's in the VA handbook, right? You can go on your favorite browser and type in VA handbook. It'll take you right to the VA page. It's 616 pages and it outlines everything you can do and can't do with the V home loan. But on top of that, the VA makes updates called VA circulars. Those updates don't get reflected in the handbook. So if you don't follow those circulars, you're not going to know what has been updated and what has not. This is my job and this is what we do at the housing education to give that to you. So let's talk first about the realtor gap when it comes to understanding the benefits and how they should be laying out your a V home loan offer. And a lot of that is because, you know, again, realtors get handed out information from other transactions because they go wrong. And those concerns have been somewhat dissolved in the community. One of the things that when you working with a realtor or looking for a realtor is like, I'm an instructor for the national association of realtors. There are military relocation, professional certification. At least it gives a glimpse to a realtor to understand how the military works, at least in a very high level overview, how the VA home loan process works. Right. And that alone is like a two hour section. But again, it's a lot of information to absorb. And a lot of times, too, it's like when you're making offers, how do you make your offer as strong as possible? So there's various caveats to a home loan when making an offer on a property that agents should know how to do. And we also see veterans getting steered away from their benefits because people will see all the loan process just too hard. It takes two months to close. Oh, you're trying to buy a condo. Well, the VA condo approval process is extremely difficult. And basically you get steered away from that. And then that's echoed through lenders as well. And I'll tell you just a quick like side note. If you're thinking about buying a vehicle, buying a condo with your VA benefits, it's actually the easiest process, I think, across the board because any condo can be purchased with the VA home loan with a property waiver. Now, even if it gets denied, you can still buy it. If it's currently denied, you can still buy it with a waiver. So you can still use your benefits. And furthermore, if you get have a let's say FHA loan or a conventional loan, you can refinance it into a VA home loan. So it makes it pretty awesome. You have options. So don't let that take away from don't let that no let anybody take that away from you as far as using your benefits for that piece. When you work with a realtor, they you want to ensure that they have experience working with VA home loans, that they know how to present the offer. They know the common misconceptions that sellers always have, which is typically going to be, are they really qualified? I'll cover that a little bit because you'd be kind of surprised on how that piece works. It's it's qualification. It's the appraisal process because people will think, well, hey, if they're doing 100 percent financing, well, they don't have any money. They're not how they qualified. They're not even putting any money down. Remember, it's the benefit of the loan product. You served your country. You have the VA home loan benefit. You don't necessarily have to put money down. Putting money down like five percent barely changes your payment and five percent of a half a million dollar purchase price. You can actually do improvements to the property to gain even more value. There's benefits to how the program works, but you can still put money down. Don't let anyone tell you that you can't, especially if you don't have like a service connected disability. You have to pay what's called a VA funding fee. That fee gets tacked onto the loan. It's a percentage based on a whole bunch of parameters. You can check out some of our other videos to learn about that. And when it comes to that, when you put more money down, the VA funding fee keeps getting lower. Now, if you have a VA disability, you don't pay the VA funding fee. You can have multiple VA home loans at the same time with that. So just know how it's structured around that. Now let's talk about lenders and some of the gaps that exist in that. So earlier I mentioned the VA handbook. So the VA kind of sets its SOP to say, look, these are your left and right limits. And I'll tell you, I'll be honest, is the VA is extremely loose on how they set parameters for employment, credit assets. And they do that for a reason because they want to give veterans an advantage. So what happens is lenders will have what are called overlays. So it's just something that they layer on to what the VA says to restrict how the program works. That's why sometimes you can go to one lender and get approved and another you'll get denied. And you're thinking like, well, how is that even possible? Good example of something like that is let's think DTI, debt to income ratios. Well, the VA technically doesn't have a debt to income ratio. They do if you have certain parameters, but overall they look at what's called residual income. So you can have a 70% DTI and still qualify for the VA home loan. It's pretty awesome. So there's definitely benefits to that. And a lot of lenders just don't know how they work. So veterans are put in, in basically working with two types of institutions, right? You have places that primarily focus on working with military members, how they bet, you know, so they, they'll just target the VA veteran buyers. Then you have lending institutions that do all different types of loan products. And then, oh, they'll get a VA home loan transaction. There's pros and cons to each of those, right? So for someone like me, I focus primarily on helping military members. We're not a call center. You can call me, you can email me, you can text me, my team, we'll get back to you. No matter where you're buying in the country, we can help you across all 50 States. The challenge with some of the bigger veteran focused institutions, which you bank with, or you get solicited to all the time, they got great commercials. You know, we, we know who they are. They're a call center, right? So when you're going into a call center, they're just pumping things out. They're not pre-approving you correctly. We get those calls all the time. My loan got denied a week before closing. Why is that? Why am I getting charged? All of these, uh, uh, veteran, actually veterans don't even question fees. They get charged the most out of any loan product out there. I'll link the video description that I did recently about that, where the VA home loan is a great product, but the big downside to it is veterans don't know how the costs work. So they actually get charged the most money out of any loan product out there. We don't do that with us. We give you flat rates, no origination fees, no discount points, unless you want to do it. That's your choice, but that's why it empowers you downside with big banks too, is that you're again in a call center. So you're not getting someone's cell phone when you're making offers on the in the evenings or on the weekends, they're not responding. You need updated pre-approvals. You need to get ahold of somebody. And then that trickles down to the real estate transaction. London ever realtors would be like, Leonard never reached out to me during the whole transaction. We're delayed. They're not communicating. Communication is the key to winning contracts and opening that up. That's why when, uh, no matter which way you go, when you're making an offer on the property, you need to ensure that your agent is CC the loan officer on the offer. The lender has all the agent's contact information, and they're actually reaching out to the agent with your offer, explaining to them that they did everything. They pulled your certificate of eligibility. They reviewed all your financial information. You're actually qualified because again, most, no matter what, which route you go, you're going to have people just winging it. They're like, oh yeah, this works or this works. You know, I'll give you a small caveat to the VA home loan that I would say 99% of you don't know is that the VA, when you qualify, assigns 14 cents per square foot for utility costs to be factored into the loan. So if a lender doesn't even know the square footage of what roughly square footage of the property you're looking at, you can be all dandy going through the transaction until the appraisal comes in a week or two before closing only to find out you're denied. Those are small nuances that you need to know. The VA loan is easy to use. I mean, it's extremely easy. We do hundreds of transactions a year, but you have to know how they work in order to utilize them. That's why a lot of people are used to conventional loans. That's why they push people towards those or that's what the offers they want to accept because no one's explaining that to them. Now you go to like a smaller lending institution, it could be a local bank, a credit union, whatever the case, be broker, banker, whatever the case may be on that. The challenge sometimes is that they don't do enough business to know how it works inside out, right? If I told you like whatever you do for your job and in life, military occupation, whatever the case may be, if I told you that I did a training on your job two years ago and you're going to be my first, let's say a VA client that took training two years ago for VA home loans, a lot has changed since then. It doesn't make somebody an expert by taking something a long time ago. You constantly have to be educating yourself, doing the transactions, everyone's situation's unique. So you got to know how those things work because issues always come up, right? No matter how perfect the situation is, there's going to be challenges with the transaction. Just knowing how to go around them through experience, sometimes painful experience gets people to that finish line. So you can be a homeowner without delays, which leads me into the misconceptions around the appraisal guys. There's so much, there's so much that hurts the lending community, the real estate community and veterans themselves around this. So I'm going to break down a couple of things. Otherwise we'd be talking for hours and which again, we will be, it's just throughout other videos that we do. So you can buy a property as is, and you're thinking to yourself, well, that's, that's, that's contradicting everything that I've heard or I've been told. So there's a couple of things that you can do when it comes to the appraisal itself and why you can buy as is, but you need to be aware of what are the consequences, I guess, on your end. If there's, again, this is also probably the number one question that we get from listing agents is that, well, the appraisal, if it's going to come back, there's going to be repairs like peeling paint, or there's a railing missing. There can be siding missing. Those are legitimate concerns because the VA has a minimum property requirements. There's a lot to remember here guys. And it sets the standard. It's also in the VA handbook on all the things that they're looking for. They could note or ding you for on the appraisal that need to be fixed. Now, in general, or throughout time, everyone believes that it's the sellers that need to make those repairs and they have to do it before closing. That's not the case. You can actually do what's called an escrow hold back for the repairs. So let me break that down with an, like an example. Let's say you have peeling paint and part of the sidewalk is missing. Let's just say you have siding that's missing. Okay. And let's say that repair cost is a thousand dollars to do. Well, typically, right? In a traditional fashion, you would ask the sellers to fix it. They say, no, because you're buying the property as is. Well, as the veteran, you could take that thousand bid that you get from a contractor. We gross it up 150%. So we hold back $1,500 later. After you close, you can do those repairs yourself. The appraiser comes back out, clears the property and boom, you can use your VA home loan. That alone wins contracts because again, it's the number one thing. Now, the only thing that you really can't get around when it comes to putting things in escrow, if it's like a safety hazard, let's say there's smoke detectors missing or you have a deck, but it has no railing. Well, that's a legitimate safety concern. Another big item is that let's say you have a garage or you have a barn, right? This is a common question we get, or like a shed, a garage and a barn. If it's dilapidated, but it doesn't, it's not going to add value to the property. The lender per your instruction can actually ask them to omit that structure completely. So you have, you don't have to fix it. Nothing. You just write a letter saying like, I don't want this fixed. I want to be able to proceed without getting this stuff done because you know, I'm going to knock it down later. Or we have different plans for the property. The downside is it won't count towards value if you need it like a garage, but most sheds and barns are not going to add anything because you can still buy like a farm residence with the VA loan, which we do videos on types of properties you can buy. So check those out throughout our videos. So those are the two primary concerns that folks have, right? Structures on properties. And then the other one is going to be condition of the property. So you can get around that, right? That's why we're here at VA housing education to help mitigate that stuff. So you can get educated. So when you're working with folks, you can actually help them understand it. Now, this is a snippet of information. If you guys want to learn more again, subscribe, like, and subscribe to my channel, share information. You can go to VA housing, education.com schedule employment with us from the lending side. And you can also talk with a realtor. So we work with a network of realtors across the country that know how to work with military members because it's important to understand that, right? And a lot of them are military members themselves. Like I'm, I'm a army vet. Most of the people we work with are going to be some affiliation with the military. So hope you guys liked the video today. Again, please like and subscribe and I'll catch you guys soon. You guys have a good day.