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Mortgages and Veterans


One of the great things about this country is that we do a lot for those who have served us. And in the area of real estate financing, we can do exceptional things.

Understand that the VA (Veterans’ Administration) is, in the mortgage world, like HUD is with FHA financing. They are an insurance company, collecting premiums and using the backing of the Federal government to guarantee the payments to lenders. Because of the government’s guarantee, lenders can stretch traditional guidelines and offer very competitive terms (of course, while adhering to the VA’s guidance).

Some of the more attractive features of a VA loan are:

  1. 100% Financing on Home Purchases - Veterans, assuming they are in good standing, can buy a home with no money down. In most cases, the maximum VA loan is $417,000.
  2. The Ability to Finance Reasonable Closing Costs - On many VA loans, the closing costs are negotiated into the sales price and the seller pays them. This feature can significantly reduce the cash a veteran needs to buy a home.
  3. More Understanding with Regards to Credit Challenges - In an effort to help those who served us, lenders are more liberal towards hiccups in credit.
  4. Common-Sense Look at Income - Rather than approve loans strictly by income ratios, VA mortgages incorporate what is called Residual Income. There is a form that actually budgets all expenses (not just housing) to account for family size, heating and electrical usage, and more.
  5. Financed Insurance Premium - The VA charges what they call a Funding Fee to set up a fund to reimburse lenders, should a default occur. The Funding Fee varies on loan terms and usage (consult your lender for exact costs), but the good news is that it is typically just added to your loan. Instead of paying thousands of dollars up front, you can pay $10-$50 a month in a higher payment.
  6. Refinancing Your VA Loan is Easy - Through the I.R.R.L. (Interest Rate Reduction Loan) Program, getting a better rate (if the market has better rates) does not carry with it all the verifications of income, credit, appraisals, and assets of other loans…and closing costs can be added into the loan! The logic is the VA is already “on the hook” and lowering the payment increases the likelihood of continued payments, so why not be as lenient as possible.

For more detailed answers, contact your local mortgage professional. With three million veterans returning home in the next couple years, the opportunity of VA financing needs to be publicized.

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About Dean Hartman

Dean Hartman is a 25-year veteran of the mortgage banking industry. He has achieved the designation of Certified Mortgage Planning Specialist (CMPS), and also specializes in sales leadership, seminar presenting, and team building.

4 Responses to “Mortgages and Veterans”

  1. MaryAnn April 19, 2012 at 9:54 am # Reply

    Would like to know more about  page 33 of this Reconcilliation Bill.

  2. Ruthbhw April 19, 2012 at 10:19 am # Reply

    Also Dean just to let you know there is an National Program ... Homes for Heroes,
    http://www.homesforheroes.com,  where the heroes can save thousands of dollars in credits at closing from the Realtor's commissions. 

  3. PatTasker April 19, 2012 at 10:32 am # Reply

    Too bad other lenders don't do #5...It just makes sense!

  4. Randy Robinson April 27, 2012 at 4:54 pm # Reply

    That would be nice! It's good news for our military men out there. This will give them a lot of benefits when loaning, well, this may be a good payment to them for having a job well done.

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