No, I'm not talking about the next Mel Gibson movie - I am referring to what used to be known as the Veteran's Administration Home Loan Program! It is my distinct pleasure to announce a kindler, gentler VA whose streamlined home loan process makes it not only a patriotic form of financing, but an efficient, valuable alternative to conventional home loans. Essentially, the VA "guarantees" a commercial lender that the VA loan they underwrite (up to $417,000) will be repaid in the event of buyer default.
According to the VA's website www.VA.gov, there are more than 27 MILLION veterans and active personnel eligible for VA financing. Due to inflated fees, complexity, and a bad reputation, VA loans fell out of favor with buyers and sellers alike in favor of more streamlined conventional home loans. To compete in the general marketplace, the VA revamped their system and placed the decision making with the loan's underwriter, which is known as "direct endorsement." In fact, generally only two requirements separate a VA loan from a conventional loan: 1) The buyer must have a valid Certificate of Eligibility (VA Form 26-1880) and 2) The appraisal must be completed by a VA-approved appraiser.
What are the benefits for a Buyer? So glad you asked. 1) There is NO DOWNPAYMENT required. 2) 100 percent (up to $417,000) loans are easily attained. If the sales price is more than the $417,000, than the buyer must finance that balance privately or put the money down. 3) The VA has authorized many different loan programs, among them traditional fixed, ARM's, and Hybrid ARM's. 4) VA loans can be used for existing homes OR new construction. 5) VA loans prohibit any junk fees beyond reasonable lender closing costs to be paid by the buyer.
For sellers, here are a few reasons to consider accepting VA loans: 1) More buyers will be able to afford higher-priced homes due to 100 percent financing and no down payments. 2) The loan process can actually move quicker than a conventional loan, as evidenced by my son, Rich, who recently completed a VA-financed sale - CONTRACT TO CLOSE - IN 7.5 BUSINESS DAYS. 3) With ever-expanding MacDill AFB just over the Bay, you will have a leg up on similar sellers who don't accept VA loans. 4) While the yellow ribbons and "Support Our Troops" magnets are excellent public displays of support, assisting a returning military member and/or their family with a home purchase is TRULY SUPPORTING OUR BRAVE MEN AND WOMEN OF THE ARMED SERVICES.
Ric Cornelius is the Broker/Manager of Sand Key Realty Sales and Rentals, Inc. Sand Key Realty has three offices with 40 agents. One office is at 740 S. Gulfview Blvd., Clearwater Beach, 727-443-0032; the second office is at 2701 Gulf Blvd., Indian Rocks Beach, 727-595-5441; and the third office is at 309 Belleview Blvd., Belleair, 727-461-4200.
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