Rochester Real Estate | LOCAL Homes For Sale https://www.rochesterrealestateblog.com Rochester Real Estate | LOCAL Homes For Sale | Homes for sale in Rochester, NY, LOCAL Rochester real estate listings, market data, REALTOR® info, and high quality content updated every 15 minutes! Wed, 25 Jun 2025 11:50:30 +0000 hourly 1 https://wordpress.org/?v=6.7.2 https://www.rochesterrealestateblog.com/wp-content/uploads/2016/11/cropped-SITE-LOGO-512-x-512-1-32x32.png What Are The PROs & CONs Of VA Home Loans? – Rochester Real Estate | LOCAL Homes For Sale https://www.rochesterrealestateblog.com 32 32 June Home Maintenance Checklist: 40+ Must-Do Tasks to Prepare Your Home for Summer https://www.rochesterrealestateblog.com/june-home-maintenance-checklist-summer-prep/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=20501 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> May Home Maintenance Checklist: 30 Essential Tasks to Prepare Your Home for Summer https://www.rochesterrealestateblog.com/may-home-maintenance-checklist/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=20484 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> April Home Maintenance Checklist: How To Prepare Your Rochester NY Home For Spring https://www.rochesterrealestateblog.com/april-home-maintenance-checklist/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=20364 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> March Home Maintenance Checklist: Get Your New York Home Ready for Spring https://www.rochesterrealestateblog.com/march-home-maintenance-checklist/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=20338 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Buy a House in New York https://www.rochesterrealestateblog.com/buy-a-house-in-new-york/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19906 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Sell a House in New York https://www.rochesterrealestateblog.com/sell-a-house-in-new-york/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19905 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Risks of Buying a Non-Warrantable Condo In New York: What You Need to Know https://www.rochesterrealestateblog.com/non-warrantable-condo/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19796 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Builders Should Know About Spec Construction Loans In New York https://www.rochesterrealestateblog.com/builders-spec-construction-loans/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19795 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Moving To The Finger Lakes Region Of New York | Guide To Relocating To The Finger Lakes https://www.rochesterrealestateblog.com/moving-to-the-finger-lakes-region/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19875 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Navigating the Numbers: The Pros and Cons of Using Online Home Value Estimators For New York Real Estate https://www.rochesterrealestateblog.com/pros-cons-online-home-value-estimators/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19794 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Role of Location in Home Valuation In New York https://www.rochesterrealestateblog.com/role-of-location-home-valuation/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19768 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Lowe’s vs U-Haul: A Review of Truck Rental Companies https://www.rochesterrealestateblog.com/lowes-vs-uhaul/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19758 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Understanding the Importance of a Seller’s Property Condition Disclosure https://www.rochesterrealestateblog.com/property-condition-disclosure-statement/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19632 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What are Delayed Showings and Negotiations in Real Estate In New York? https://www.rochesterrealestateblog.com/delayed-showings-negotiations/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19547 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 8 Viable Tactics to Selling Your Home and Moving Out of State https://www.rochesterrealestateblog.com/selling-home-moving-out-of-state/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19542 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Unconventional Methods for Selling a House: Thinking Outside the Box https://www.rochesterrealestateblog.com/unconventional-methods-for-selling-a-house/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19519 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Should I Sell My House Off Market: Pros and Cons Explained https://www.rochesterrealestateblog.com/sell-house-off-market/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19503 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What is PITI and How Does It Affect Your Mortgage https://www.rochesterrealestateblog.com/what-is-piti/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19498 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How To Set A Home Renovation Budget https://www.rochesterrealestateblog.com/home-renovation-budget/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19490 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How Does A Co-Borrowers Credit Scores Affect A Home Purchase? https://www.rochesterrealestateblog.com/co-borrower-credit-score/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19474 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> New Construction Final Walk-Through Checklist: Ensuring a Seamless Home Inspection https://www.rochesterrealestateblog.com/new-construction-final-walk-through/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19458 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Essential Tips for Pumping a Septic Tank: What You Need to Know https://www.rochesterrealestateblog.com/pumping-a-septic-tank/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19450 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Can You Submit Multiple Offers On Homes At Once – A Legal And Ethical Analysis https://www.rochesterrealestateblog.com/multiple-offers-on-homes-at-once/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19414 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Get Your Home Photo Ready for Real Estate Listings https://www.rochesterrealestateblog.com/real-estate-photo-ready/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19409 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Does a Home Builder’s Warranty Cover? https://www.rochesterrealestateblog.com/home-builders-warranty/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19394 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> July 2023 Greater Rochester NY Area Real Estate Market Update https://www.rochesterrealestateblog.com/july-2023-rochester-ny-real-estate-market-update/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19403 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Who Pays Real Estate Commission When You Buy or Sell a Home https://www.rochesterrealestateblog.com/real-estate-commission/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19366 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Quitclaim Deeds: What You Need to Know https://www.rochesterrealestateblog.com/quitclaim-deeds/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19358 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What to Know About Selling a Home As Is for Cash https://www.rochesterrealestateblog.com/selling-home-as-is-cash/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19347 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Know if My House Has Paranormal Activity https://www.rochesterrealestateblog.com/is-my-house-haunted/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19342 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Why Find The History of a House https://www.rochesterrealestateblog.com/find-history-house/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19316 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> June 2023 Greater Rochester NY Area Real Estate Market Update https://www.rochesterrealestateblog.com/june-2023-rochester-ny-area-real-estate-market-update/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19313 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Does a Real Estate Lawyer Do? https://www.rochesterrealestateblog.com/real-estate-lawyer/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19181 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> May 2023 Greater Rochester NY Area Real Estate Market Update https://www.rochesterrealestateblog.com/may-2023-rochester-ny-area-real-estate-market-update/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19162 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What to Know About Buying a Home For The First Time https://www.rochesterrealestateblog.com/buying-home-first-time/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19058 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> <strong>What Should a Buyer Look For at a Home Inspection?</strong> https://www.rochesterrealestateblog.com/what-look-for-home-inspection/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18983 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Companies That Buy Houses For Cash Reviewed https://www.rochesterrealestateblog.com/companies-buy-houses-for-cash/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18889 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Does Home Staging Work and What is The Cost? https://www.rochesterrealestateblog.com/does-home-staging-work/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18814 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What to Avoid When Getting a Mortgage https://www.rochesterrealestateblog.com/avoid-when-getting-mortgage/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18797 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> <strong>5 Options For Replacing a Roof Reviewed</strong> https://www.rochesterrealestateblog.com/replacing-roof/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18771 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Are Restrictive Covenants in Real Estate? https://www.rochesterrealestateblog.com/restrictive-covenants/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18714 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Can The Court Force The Sale of Your House in Divorce? https://www.rochesterrealestateblog.com/court-force-sale-divorce/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18693 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Real Estate Agent vs. Broker: What&#8217;s The Difference? https://www.rochesterrealestateblog.com/real-estate-agent-vs-broker/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18650 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How To Determine Square Feet In Your House For More Accurate Property Estimates https://www.rochesterrealestateblog.com/determine-square-feet/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18167 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 3 Things That Often Results in a Real Estate Agent Getting Sued https://www.rochesterrealestateblog.com/real-estate-agent-sued/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18133 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Top 5 Types Of Home Inspections Buyers Should Consider https://www.rochesterrealestateblog.com/5-types-home-inspections/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18119 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Pros And Cons Of Rent To Own Homes: What You Need To Know https://www.rochesterrealestateblog.com/pros-cons-rent-own-homes/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18104 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 5 Smart Things To Do Before Moving That Will Help Ease Your Transition https://www.rochesterrealestateblog.com/things-before-moving/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18084 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Become a Real Estate Agent https://www.rochesterrealestateblog.com/become-real-estate-agent/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18071 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Renting A House Or An Apartment: Which Is The Better Option https://www.rochesterrealestateblog.com/renting-house-apartment/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17871 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The 5 Most Important Factors To Consider When Buying A House https://www.rochesterrealestateblog.com/5-factors-buying-house/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17851 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Buyers And Sellers Need To Know About An Appraisal Gap https://www.rochesterrealestateblog.com/appraisal-gap/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17827 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Pros And Cons Of Renting With Roommates – What You Need To Know https://www.rochesterrealestateblog.com/renting-with-roommates/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17794 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 6 Things You Should Know About Buying Land https://www.rochesterrealestateblog.com/things-know-buying-land/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17773 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How Long Should Home Sellers Wait To Respond To An Offer On Their Home? https://www.rochesterrealestateblog.com/home-sellers-wait-respond-offer/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17745 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How To Buy A House With A Low Credit Score https://www.rochesterrealestateblog.com/how-to-buy-a-house-with-a-low-credit-score/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16819 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Things To Consider When Shipping A Car https://www.rochesterrealestateblog.com/things-to-consider-when-shipping-a-car/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16248 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Home Depot Truck Rentals: What to Know Including Pricing https://www.rochesterrealestateblog.com/home-depot-truck-rentals-what-to-know-including-pricing/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16156 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 16 Things To Do Before Listing Your Home For Sale https://www.rochesterrealestateblog.com/16-things-to-do-before-listing-your-home-for-sale/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16138 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Biggest Home Inspection Mistakes to Avoid https://www.rochesterrealestateblog.com/biggest-home-inspection-mistakes-to-avoid/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16112 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How Your Credit Score Impacts Your Ability To Buy A House https://www.rochesterrealestateblog.com/how-credit-score-impacts-buying-house/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16086 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top Winter Home Selling Mistakes | 7 Errors Made While Selling A House During The Winter https://www.rochesterrealestateblog.com/top-winter-home-selling-mistakes/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16051 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top Winter Home Buying Mistakes | 11 Errors Made While Buying A House During The Winter https://www.rochesterrealestateblog.com/winter-home-buying-mistakes/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16013 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Address Change Form Should I Use At The Post Office? https://www.rochesterrealestateblog.com/address-change-form-post-office/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15981 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Does Contingent Status Mean in Real Estate? https://www.rochesterrealestateblog.com/what-does-contingent-status-mean-real-estate/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15956 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> DIY Renovation Ideas For Your Backyard https://www.rochesterrealestateblog.com/diy-renovation-ideas-backyard/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15937 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Rent Your First Apartment Guide https://www.rochesterrealestateblog.com/how-to-rent-an-apartment/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15931 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Tips For Selling A Home Virtually https://www.rochesterrealestateblog.com/tips-selling-a-home-virtually/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15907 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Complete Winter Storage Checklist For Your Belongings https://www.rochesterrealestateblog.com/winter-storage-checklist/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15885 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Should I Waive My Home Inspection When Buying A House? https://www.rochesterrealestateblog.com/should-i-waive-my-home-inspection/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15870 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Biggest Self Storage Companies Reviewed https://www.rochesterrealestateblog.com/biggest-self-storage-companies/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15836 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Earnest Money and House Deposits Explained https://www.rochesterrealestateblog.com/earnest-money-house-deposits-explained/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15760 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Moving Mistakes To Avoid https://www.rochesterrealestateblog.com/moving-mistakes-to-avoid/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15568 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top Mortgage Myths | Demystifying Common Home Loan Misconceptions https://www.rochesterrealestateblog.com/top-mortgage-myths/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15102 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> First-Time Home Buyer Mistakes to Avoid https://www.rochesterrealestateblog.com/first-time-home-buyer-mistakes/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=14815 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 10 Tips For Adding Appeal To Your Home This Summer https://www.rochesterrealestateblog.com/10-tips-adding-appeal-to-home-this-summer/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=14237 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Exploring The Merits of Smart Home Technology When Selling a Home https://www.rochesterrealestateblog.com/smart-home-technology-selling-a-home/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13782 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top Frequently Asked Questions From Home Sellers https://www.rochesterrealestateblog.com/top-frequently-asked-questions-home-sellers/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=2424 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> First Time Home Buyer Programs In Rochester NY &#8211; Updated January 2025 https://www.rochesterrealestateblog.com/first-time-home-buyer-programs/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock http://rochesterrealestateblog.com/?p=580 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How New Doors &#038; Windows Can Boost Your Home Value https://www.rochesterrealestateblog.com/how-new-doors-windows-boost-your-home-value/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13643 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top 5 Things To Know When Flipping Your First House https://www.rochesterrealestateblog.com/5-things-to-know-when-flipping-your-first-house/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13574 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Are The Best Mortgage Options for Self Employed Borrowers? https://www.rochesterrealestateblog.com/mortgage-options-for-self-employed-borrowers/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13450 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top 10 Best Places To See Christmas Lights In Rochester NY https://www.rochesterrealestateblog.com/top-10-best-places-see-christmas-lights-rochester-ny/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=10236 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Are The PROs And CONs Of Multifamily Homes? https://www.rochesterrealestateblog.com/what-are-the-pros-and-cons-of-multifamily-homes/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13219 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Low-Cost Home Improvements Should You Make Before Selling Your Home? https://www.rochesterrealestateblog.com/low-cost-home-improvements-you-should-make-before-selling-your-home/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13114 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 15 Things Millennial Home Buyers Look At While Buying A House https://www.rochesterrealestateblog.com/15-things-millennial-home-buyers-look-at-while-buying-a-house/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13028 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How Does A Fence Increase The Value Of Your Home https://www.rochesterrealestateblog.com/how-does-a-fence-increase-the-value-of-your-home/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12995 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 5 Simple &#038; Low Cost Fixes To Make Your Home More Appealing To Buyers https://www.rochesterrealestateblog.com/5-simple-and-low-cost-fixes-to-make-your-home-more-appealing-to-buyers/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12779 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How To Improve A Homes Curb Appeal In Rochester NY https://www.rochesterrealestateblog.com/how-to-improve-a-homes-curb-appeal-rochester-ny/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12665 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 7 Ways to Create an Energy-Efficient Home While Conserving Your Budget https://www.rochesterrealestateblog.com/7-ways-create-an-energy-efficient-home/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12633 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Hiring Movers Vs. Moving Yourself | The PROs &#038; CONs Of Each https://www.rochesterrealestateblog.com/hiring-movers-vs-moving-yourself/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12592 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Should You Pay Off Student Loans Before Purchasing a Home? https://www.rochesterrealestateblog.com/pay-off-student-loans-before-purchasing-a-home/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12531 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Should I Build A New Home Or Buy An Existing Home? https://www.rochesterrealestateblog.com/should-i-build-a-new-home-or-buy-an-existing-home/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=2497 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Buying A Condo Vs. Renting A Condo | What Are The PROs &#038; CONs? https://www.rochesterrealestateblog.com/buying-a-condo-vs-renting-a-condo/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12402 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 9 Money Saving Moving Tips | How To Cut Costs When Moving https://www.rochesterrealestateblog.com/9-money-saving-moving-tips/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12341 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Create a Proper Home Maintenance Checklist https://www.rochesterrealestateblog.com/how-to-create-a-proper-home-maintenance-checklist/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12300 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 5 Tips For Tenant Screening | How To Weed Out Bad Tenant Applicants https://www.rochesterrealestateblog.com/tips-for-tenant-screening/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12291 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Best Social Media Blogs For Real Estate From 2017 https://www.rochesterrealestateblog.com/best-social-media-blogs-2017/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12045 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Best Home Improvement Blogs From 2017 | Advice For Home Remodeling https://www.rochesterrealestateblog.com/best-home-improvement-blogs-2017/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12044 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Best Mortgage Blogs From 2017 | Advice For Home Financing https://www.rochesterrealestateblog.com/best-mortgage-blogs-2017/ Tue, 10 Jan 2017 12:30:16 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12043 Should I Take Advantage Of VA Home Loans When Buying A Home? [caption id="attachment_10388" align="aligncenter" width="450"]What Are The PROs & CONs Of VA Home Loans What Are The PROs & CONs Of VA Home Loans[/caption] Veteran Affair home loans, commonly referred to as VA home loans, have always been a popular type of financing for military home buyers who may not have pristine credit scores or a ton of money to put towards closing costs and down payment.  VA loans can be a fantastic mortgage product for some, while for others they may not actually be the best fit. It's critical that as you're beginning the process of buying a home that you evaluate what type of mortgage is the best fit for you.  This can be done by consulting with an experienced mortgage professional.  If you're not sure where to find an experienced mortgage professional, you may consider asking a successful real estate professional who'll have some recommendations. Below you'll find out what VA home loans are, how to determine if you're eligible for VA home loans, what the PROs are to VA home loans, and finally, what the CONs are to VA loans.  Before deciding to take advantage of a VA loan, make sure you understand them in detail and the information below should be a huge help.

What Are VA Home Loans?

VA loans are a mortgage product that are designed to help Veterans, service members, and surviving spouses become homeowners.  Part of the US Department of Veteran Affairs mission to those who're eligible for VA home loans reads,
"We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy."
VA home loans are available through private lenders such as banks and mortgage companies.  The VA does guarantee a portion of the loan which enables a lender to provide more favorable terms.

How To Determine If You Qualify For VA Home Loans

There is a common misconception that exists with VA loans.  This misconception is that only Veterans are eligible to take advantage of this mortgage product. In order to determine if you qualify for VA home loans, you first must be able to prove that you have acceptable credit, sufficient income, and a valid Certificate of Eligibility, commonly referred to as a COE.  The home you're planning on purchasing with the VA loan must also be used as a primary residence and cannot be purchased as an investment property or for other uses. The best way to determine if you're eligible for a VA loan is to discuss in detail with a mortgage professional who has experience working with VA loans.  There are however some general guidelines that can help you determine if you may qualify for a VA home loan, which are listed below. By meeting one or more of the following criteria, in all likelihood, you'll be able to qualify for a VA loan.
  • You've served for more than 90 consecutive days of active service during wartime
  • You've served for more than 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You're the spouse of a service member who has died in the line of duty or as a result of a service related disability
  It's always recommended that before you start shopping for homes that you discuss all your options with a mortgage professional.  If you're considering a VA loan, it becomes even more important to talk with a lender before looking at homes. There are way more benefits of getting pre-approved for a mortgage before looking at homes than there are drawbacks!

What Are The PROs Of VA Home Loans?

VA home loans come with many benefits and potentially is an ideal fit for your home purchase.  Below are some of the greatest benefits of utilizing a VA loan to purchase a home.

1.) No Down Payment Options

[caption id="attachment_10389" align="aligncenter" width="450"]No Money Down Options Are An Advantage Of VA Home Loans No Money Down Options Are An Advantage Of VA Home Loans[/caption] One of the most popular ways to buy a home with no money or very little is by taking advantage of the VA home loan products.  Arguably the biggest benefit to VA loans are the no money down options they offer. Other type of mortgage products require a buyer to supply a percentage of a homes purchase price to be used towards a down payment.  For example, FHA loans require a buyer to put a minimum of 3.5% down. Many home buyers don't know how to save for a down payment on a home.  VA home loans allow a buyer the ability of not having to come up with a down payment.  This can be a substantial savings for a buyer, especially those who don't have a lot of money saved up. If you're considering a VA loan, there are some advantages to putting some money down on a home, if able.  Putting money down on a home brings the loan-to-value down which reduces the monthly payment amounts and also reduces the amount of interest paid over the life of a loan.  Putting money down also increases the amount of equity you have in your home. Bottom line, make sure that you understand the PROs and CONs of small down payment home loans beforehand.

2.) Eliminate Mortgage Insurance

Another fantastic benefit of VA home loans is that there's no mortgage insurance that's required.  Mortgage insurance is an amount of money that is either paid upfront or monthly by a homeowner that protects a lender in the event of a buyer defaulting on their mortgage. In some circumstances on an FHA loan, mortgage insurance may be required for the life of the loan.  On conventional loan products it's required until the homeowner reaches a certain loan-to-value percentage. Eliminating private mortgage insurance is always a huge relief for homeowners that're able.  If you're taking advantage of a VA loan, you'll never have to worry about mortgage insurance.

3.) No Prepayment Penalties

One of the frequently asked questions about mortgages is whether or not there are prepayment penalties or not.  Some types of mortgages will penalize the borrower if they attempt to pay off their mortgage early.  Yes this sounds crazy but it's true.  Lenders want to continue to collect on the interest from the mortgage and if it's paid off early, there is not an opportunity to do so. VA home loans have no prepayment penalties.  This is a huge advantage for home buyers who're going to be taking advantage of a VA loan.

4.) Flexible Mortgage Guidelines

Every lender and mortgage product has different guidelines.  These guidelines are sometimes referred to as mortgage overlays.  An attractive feature of VA home loans is that the mortgage overlays tend to be more flexible than other mortgage products, such as FHA and Conventional loans. One of the biggest differences between mortgage overlays for VA home loans is the debt to income ratio.  The VA allows a buyer to have a debt to income ratio up to 41% or less. The VA is also typically more understanding of previous bankruptcies and foreclosures.  Some mortgage products will require a buyer to wait up to 7 years after a bankruptcy, while the VA will allow some buyers to obtain a mortgage just a couple years after a bankruptcy or foreclosure.

5.) Extensive Inspection Process

It's always recommended to perform an independent home inspection when buying a home, regardless if you're thinking about obtaining a VA loan or not.  There are many reasons why having a home inspection is a good idea.  The VA does not require an independent home inspection, but they do have other requirements that must be met prior to funding. A term that you may hear when learning about VA home loans is MPRs, which stands for minimum property requirements.  When a VA home appraisal is conducted the appraiser must inspect several items within the subject property. The VA appraiser will be inspecting a homes heating and cooling system, roof, ventilation systems, hot water production capabilities, and a handful of other things.  A VA appraisal will generally be more strict than an FHA or Conventional appraisal, which is a benefit to buyers obtaining a VA loan.

What Are The CONs Of VA Home Loans?

As you can see, there are several excellent benefits to VA home loans.  It's important to understand though that a VA loan can come with some drawbacks as well.  Below are some of the CONs of VA home loans to consider.

1.) Potential Loss Of Appeal To Home Sellers

[caption id="attachment_10390" align="aligncenter" width="450"]VA Home Loans Are Potentially Less Appealing To Home Sellers! VA Home Loans Are Potentially Less Appealing To Home Sellers![/caption] One of the biggest negatives to VA home loans is the potential loss of appeal to home sellers.  Since VA home loans are subject to a strict appraisal, this can sometimes make a home seller uneasy, especially if they've never sold to a VA home buyer in the past.  VA home loans generally result in more bank appraisal issues than FHA or Conventional loans so some sellers may avoid them at all costs. Another reason why a VA home buyer maybe less appealing to a home seller than an FHA or Conventional buyer is due to the fact that many VA home loans will be no money down.  Due to the fact that a buyer may not have to put any money down on a home, this can be a red flag for a home seller that the buyer doesn't have a lot of money available which could jeopardize their mortgage approval. It's not uncommon for buyers who're obtaining a VA loan and buying a home in a competitive market to lose out in multiple offer situations.  As one of the top Rochester NY listing agents, I often see that in multiple offer situations buyers who put more money down and buyers who obtain conventional or FHA financing win over buyers who're obtaining a VA home loan.

2.) VA Funding Fee

Another negative of VA home loans is the VA funding fee that's required.  The VA funding fee is a one-time fee paid directly to the Department of Veteran Affairs for any home purchase or refinance.  The purpose of the VA funding fee is to offset the cost should a loan go into default and also ensures that VA loans are available for future buyers. The VA funding fee can be paid upfront in full or can be factored into the borrowers monthly mortgage payment.  Before deciding to obtain a VA loan, make sure you calculate how much the VA funding fee is going to be.  There are several VA funding fee calculators available online to help you determine exactly how much you should expect to pay.

Final Thoughts

VA home loans are a fantastic option for some home buyers who're eligible.  As with anything, there are going to be PROs and CONs and it's vital to evaluate both before making a decision. In most cases, VA home loans are the best option for Military and veteran home buyers but it's possible, in some cases, they're not.  The PROs and CONs listed above should help you determine if a VA loan is the right fit for you.  Again, if you're not sure, reach out to a local VA home loan expert for their assistance and guidance.

Other Top Resources For Military & Veteran Home Buyers

Are you a Military or Veteran home buyer in Rochester NY?  If so, the PROs and CONs of VA home loans above should help you decide whether a VA loan is the right product for you or not.  If you don't have a real estate agent yet, contact me and I'd love to discuss the home buying process with you.  I've helped dozens of Rochester NY Military & Veteran home buyers achieve the dream of home ownership!
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "What Are The PROs & CONs Of VA Home Loans?" was written by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.  With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]>