Five true or false questions designed to see what you know when it comes to VA loans. Here we go:
1.True or False, the VA loan is only for veterans.
That’s false. It’s available to veterans of course but it’s also available to active duty service men and women, members of the National Guard, and surviving spouses.
2. True or False, you better be careful when you use the VA loan, because you can only use it once.
False again. You can use the VA loan multiple times. You just to restore what’s called the entitlement. Which is the dollar amount you’re able to borrow under the program. In most cases that means paying off one loan before you get another. But in some cases you might be able to have two VA loans at once, as long as both loans combined are under the entitlement cap.
3. True or False, the VA loan can be used for buying a house, refinancing a house, or even a cash out refi.
True. The VA loan can be used for many, many purposes, not just buying a house. You can also refinance a place to get a lower interest rate or do that cash out refi. You can also pull out equity for home improvements, education, or paying off debt. The VA loan is very flexible.
4. True or False. The VA does not hold the mortgage, a private lender does.
That’s true. The VA guarantees the loan, they don’t actually hold the note. But that guarantee is so powerful in today’s mortgage market place that over 22 million people have used the VA loan since World War 2. That guarantee also means there’s no Private Mortgage Insurance (PMI), which the VA says will save you a lot of money over the course of your loan.
5.True or False, a VA loan is risky because it’s a zero down mortgage, and that’s what got us into the housing crisis.
That my friend is false. Yes, the housing crisis was fueled in part by zero down home loans. And yes, the VA loan is also zero down, but the rate of default among VA loans is among the lowest of any mortgage in America. Even lower than FHA backed loans. Why, the vast majority of veterans and active duty service members pay their mortgages and pay them on time every month.
So, how did you do on the quiz? I hope you did well. If you’re a veteran or active duty member of the armed services I hope you understand all the benefits you’ve earned. Contact a real estate professional to help you get into a home with the VA loan.
If you’re a civilian, have you ever told a veteran or active duty service member, “Thank you for your service”. Just think, the VA loan says the same thing. Except it’s not just you, it’s everyone. It’s the people and government of America speaking with one collective voice telling every one of our Nation’s defenders, thank you for your service.