For many families, homeownership is a life-long dream that represents their hopes for a better future. So, it’s only natural that a VA home loan applicant might have a series of questions or misconceptions about the VA loan process. It’s important for applicants to seek expert advice on VA loan myths before they use this benefit to purchase their own home.
At The Federal Savings Bank, we consider it our mission to educate borrowers about their options for home financing. These myths about VA loans can keep the men and women who’ve served our country from owning their own homes. We believe learning more about common VA mortgage myths is an important early step while you’re evaluating your options for a home loan.
VA Loan Myth #1: Only Veterans Can Access VA Mortgages
One of the most common misconceptions about VA home mortgages is the idea that only veterans are eligible for VA home loans. Even though these loans are named for the Department of Veterans Affairs, VA home loan programs may be accessed by several people.
A Certificate of Eligibility (COE) will verify whether you are eligible for a VA home loan. Aside from veterans, applicants who meet the criteria for VA loans include:
- Active-duty service members
- Reserve members
- Members of the National Guard
- Qualified spouses of veterans. This extends to the spouses of service members who have gone missing in action, been prisoners of war, died while in service, or who have a service-related disability.
VA Loan Myth #2: This is a One-Time perk
Myths about VA loans may include the idea that VA programs can only be used once. This is not true. Your VA home loan program is lifelong and available to you for multiple purchases (so long as you are buying a primary residence and have paid off previous primary residence restoring entitlement).
There’s no limit to the number of times you can use your VA loan programs, so long as you qualify and have enough loan entitlement available. Your loan officer can help you understand exactly what you qualify for.
VA Loan Myth #3: Rates and Fees are Too Expensive
When you’re considering applying for a non-conventional home loan, it’s normal to be concerned about high interest rates and high fees that could be associated with closing on your new home.
VA home loans are especially designed to be the best mortgage available to those who are eligible, and they often offer the best interest rates and lowest monthly payment option for homebuyers. VA borrowers do not have to pay for private mortgage insurance (PMI); and with full entitlement and good credit, they will not have to make a down payment either.
Many borrowers are willing to pay the associated VA funding fee to access these VA loan programs, but certain borrowers are exempt from this fee as well.
VA Loan Myth #4: VA Home Loans Can Only Be used to Purchase a House
VA home loans were first proposed to help veterans and active-duty service members obtain housing. But you don’t need to buy a new home to utilize your VA loan products. You may have access to VA home loan programs if you are seeking to do one of the following:
- Build a house
- Buy and improve a new primary residence
- Refinance an already existing mortgage.
Remember: your lender can help you determine your options when you are just starting out. Consider speaking with one of The Federal Savings Bank’s VA lending specialists to see if you qualify.
VA Loan Myth #5: You Can’t Get a VA Home Loan if you are self-employed or unemployed.
Some borrowers have an understandable cause for concern if they are applying for a VA home loan while self-employed, especially in times of economic uncertainty. And if you have been recently unemployed, you might fear you won’t qualify for a VA mortgage.
But contract workers, business owners, and those who are or have been recently unemployed may all qualify for VA home mortgages. You will need to provide your lender with additional documentation when you apply for a VA loan:
- Self-employed workers need to demonstrate two years of sufficient income to repay their mortgage. Depending on how you file for your taxes each year, you might probably submit your personal tax returns, and sometimes those for your business if applicable. You may need to submit your business’s balance sheets or bank statements, and you might be subject to a minimum credit score requirement.
- People who have job gaps or are unemployed can still get a VA loan, provided they can demonstrate to have a reliable income. VA mortgages are available to borrowers who receive public assistance, alimony, and child support, as well as those who receive disability income from the VA. Additional definitions of unemployed: VA mortgages are available to borrowers who receive public assistance, alimony, and child support, as well as those who receive disability income from the VA.
There are more than a few myths about VA loans that deter future homeowners from getting the most out of their entitlement. At The Federal Savings Bank, we try to meet financial misinformation with expert advice. We believe that every day, VA loans make purchasing a home more attainable for American families.
For assistance in navigating the VA loan process, please contact our team by calling +1 877-788-3520, or by further exploring our Learning Center. The Federal Savings Bank is eager to help you find the perfect home.
Subject to credit approval. Terms and conditions may apply. Subject to VA eligibility requirements. Property insurance is required on all loans secured by property.