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We will be 1st time home buyers too and are finding really hard for someone to explain to us the loan process without giving our SSN. We want to know what’s different about a VA loan and a regular mortgage loan? any feed back would be greatly appreciated.
I have poor credit and I am the Vet and work at the Post Office. My wife has excellent credit but is not working. Do you think we would qualify for a VA loan with those stats? Our home is appraised at $ 115,000 and my income is around $ 60,000 a year. Your feed back is welcomed.

3 Thoughts on We want to buy our first home I would qualify for a VA loan … whats the difference?
  1. Reply
    June 7, 2011 at 3:02 am

    A VA loan is exclusive to veterans only. It provides 100% financing and the seller can pay all the closing costs so you basically come in with $ 1.00. However, some of the closing costs can be paid by you as well. Some sellers will not accept VA financing because there are some costs the Vet is not allowed to pay and is paid by the seller. Depending on the market and the equity the seller has will determine if they will accept VA financing. I disagree with the answer above that the rates are better. This is not always true. There is a VA funding fee involved that increases your loan amount and the rates are pretty comparable to FHA. VA does require their own appraisers and houses are looked at differently then most regular loans.

    A “regular” loan is open to everyone. There are many different types to get into here. But a good loan consultant will determine which way is the best route for you to go. It used to be VA allowed higher qualifying but that has since changed and conventional loans can qualify sometimes much higher then VA.

    Now depending where you are located, I know in CA and some parts of Arizona, there are first time homebuyer programs made available that typically have below market financing and up to 100%. and some 103% to help with closing costs. Not all lenders are able to do these so you may want to check around. If you are in CA I can am an authorized lender by the state of CA to provide this program. Otherwise, double check your state and county websites to see if they offer something like this.

    Now as far as giving out your ssn, a lender can quote you the program and if it sounds good, then give the lender the ssn because without running credit and finding out about income, it’s only a quote.
    I hope this helps.

  2. Reply
    Cheryl G
    June 7, 2011 at 3:36 am

    A VA loan is available for 100% of the purchase price and the seller typically has to share in the transfer and recordation taxes (about 2%). Points are lower, too. The VA appraisal does go further than a FNMA appraisal to help assure the vet that the house is sound and the investment solid.
    Don’t like the answers you’re getting or the treatment you’re receiving from lenders? Call VA directly and complain! They will definitely follow up.

  3. Reply
    June 7, 2011 at 4:17 am

    VA is exceptionally generous with credit issues, so that helps. In fact, even with the 2-3% upfront VA Funding Fee (the money you pay to the VA to guarantee your loan to the bank), it’s the cheapest deal out there for 100% financing with weak credit. Rates right now 6.5-7.0% for a 30 year fixed, with no monthly mortgage insurance. If you were disabled in the service, you generally are exempt from paying the upfront funding fee too.

    Conventional financing is usually stricter on credit, but has many flexibilities in many regards.

    I’d stick with your current course. Shop around and find a bank that does VA with any frequency (many don’t do them at all, or so rarely they barely know how to do them). The major banks, like Wells Fargo, Bank America, Citi, Chase, etc… are generally the most experienced with the government programs, though a good local broker could certainly be as well.

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