If you are a retired or current member of the military, you are entitled to certain benefits like VA home loans. With their low rates and favorable terms, Veterans Affairs (VA) loans have helped service members and veterans affordably buy homes and refinance mortgages for many decades.
Unfortunately, the bulk of these individuals do not take advantage of these perks. While there are more than 21 million service members and veterans in the United States today, only about 6 percent have used a VA loan to purchase a home in the past five years, according to the U.S. Department of Veterans Affairs.
One of the most important aspects of the home-buying process is selecting the right VA home loan lender. Your home lender should not only offer VA home loans but should also be approved by the Department of Veterans Affairs. Before making a decision, ask your VA home loan lender the following important questions:
1. What Experience Do You Have?
You want to feel comfortable with your VA home loan lender. To ensure that you are working with a qualified lender, ask about their background and experience in the mortgage industry. You will also want to ask about their direct experience with the VA loan process. Take the time to read the lender’s testimonials page and reviews from real customers.
2. Are You a Mortgage Banker or Broker?
Today there are two main types of mortgage companies – those with mortgage bankers and those with mortgage brokers. Brokers arrange financing between lenders and borrowers, but do not actually issue the loan approval or provide any actual funds. Mortgage wholesalers often use brokers to find loans for them. Bankers offer additional benefits with the biggest being more control over the lending process.
3. Can You Recommend Veteran-Friendly Agents?
While not essential, many veterans prefer working with agents who play a critical role in guiding veterans through the complex home-buying process. After receiving loan pre-approval, military home buyers may want to work with an agent who understands their unique needs. A VA home loan lender may recommend top real estate agents in your area.
4. Do I Qualify for a Loan With No Down Payment?
As restrictions surrounding home loans continue to tighten, many lenders no longer give out zero down payment options. VA loans are one of the only remaining loan types that allow borrowers to finance up to 100 percent of their home loan value. However, military home buyers may still need to meet certain criteria to be eligible, including strict credit criteria. Ask your VA home loan lender if you qualify for a home loan with no down payment.
5. Are You a LAPP Approved Lender?
The Lender Appraisal Processing System, or LAPP, is a program available to lenders who meet certain requirements. By using a LAPP lender, VA assigned appraisers have the opportunity to close an applicant’s loan which allows the loan process to be expedited. A VA home loan lender who does not have LAPP authority may require additional time to approve and close a home loan.
6. What Is the Interest Rate on My Loan?
A great VA home loan lender will work hard to get you a fair interest rate on your home loan. While VA loans typically have interest rates that are below the national average, it is not always easy to obtain a favorable interest rate without having excellent credit or other financial qualifications to back you up. Ask your VA home loan lender what the interest rate will be on your loan and if they can lock in the rate during the loan process period.
7. How Long Will It Take to Close My Loan?
The home buying process can be long and complex. Most service members and veterans want to speed up the process to get into their new homes and start this new phase of their lives. Most sales contracts allow for a 30 day close. Ask your VA home loan lender approximately how long it will take to close your loan. As mistakes can happen, it is important that the lender leaves extra time to account for any unforeseen hurdles.
8. Can I Transfer My Loan Later On?
While you do not expect to sell your home right away, you may decide in the far future to move. Ask your VA home loan lender what rules they have regarding loan transfers. Some VA lenders will allow you to transfer your loan to the next buyer which can save both the buyer and seller substantial time and money.
Are you ready to buy a home? Carefully select a VA home loan lender who you feel comfortable working with and who will assist you in acquiring the best loan terms for your military family.
