On this Veterans Day 2021, I want to honor our veterans by spreading some knowledge about the VA Loan with sellers and their agents. The VA Loan is seldom understood and often overlooked in competitive situations. Sellers and agents alike offer lame excuses like it is “too expensive” on the seller, “more difficult” to close, or simply “takes too long.”
Let’s dispel those myths once and for all!
In Colorado, there is little difference between a transaction with a VA Loan versus one with a conventional mortgage.
I am going to write that again but larger.
In Colorado, there is little difference between a transaction with a VA Loan versus one with a conventional mortgage.
You know what, that doesn’t quite capture it either. Let’s make sure that statement sticks.
In Colorado, there is little difference between a transaction with a VA Loan versus one with a conventional mortgage.
I hope that gets the point across for someone. To further elaborate on the point, here are 5 common VA Loan misnomers and the truth behind each one when compared to a conventional mortgage:
As a Seller, am I on the hook for the VA Funding Fee?
No. While it can be negotiated, sellers are not obligated to pay the VA Funding Fee. Most buyers roll this into their loan amount.
Is the appraisal process for a VA Loan more difficult? Will my house be scrutinized more closely?
No. The appraisal process is nearly identical to conventional mortgages. The only item that may come up during a VA appraisal is if the home you are selling has chipping or peeling paint anywhere. There are also states that require a termite inspection, but Colorado is not one of them.
Does a VA Loan take longer to process than a conventional mortgage?
No. The VA Loans do not take any longer to close than conventional mortgages. The compliance laws surrounding disclosures and closing are identical between the two. While the lender does have a few additional tasks to perform for a VA Loan, a reliable lender will complete them without adding to the timeline.
What about all of those fees? Aren't there more fees when I sell to a VA borrower versus a conventional borrower?
No. Fees for title, conveyance, and tax preparations are identical to conventional borrowers.
What is the maximum seller concession that can be requested by the buyer using a VA mortgage?
The maximum seller concession that can be requested by a VA buyer is 4% of the purchase price.
Through education, let us all do our part to help sellers get more comfortable with a VA Loan to better serve our veterans who proudly served us.
I encourage veterans to shop lenders and find one that provides a great rate, understands the Denver Metro market, and works on your schedule. I have worked with some great ones — even closing a VA Loan in under 3 weeks! Message me and I am happy to make an introduction.
And to our veterans let me also add a sincere THANK YOU.
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