The world of VA loans and mortgage lending can be a confusing and intimidating one. Making a $150,000 or $300,000 purchase is scary enough. It can get worse when you feel uninformed or uncertain of the path that leads to such a big, often life-changing transaction. My goal is to try and help allay those fears with information, explanation and honesty.
We get some great questions day in, day out at the VA Loans Insider community and across the entire Veterans United Network. I want to share some of the recent ones along with the answer. Remember you can always send me your questions on Facebook or at email@example.com.
Q: If I wanted to get preapproved today would it be good in a year when I want to get a home or would I have to go through the process again? (Brandon Harbert)
A: Some preapproval letters have dates, others don’t. But any lender is going to re-check your credit, income and employment. Preapproval is not a guarantee. But it can help let you know where you stand and give you a sense of your purchasing power.
Building Extra Costs Into a Loan
Q: We found a new home that was being constructed and for whatever reason is on the market leaving the buyer to finish. It’s basically done except finish work inside; flooring, woodwork, cabinets, faucets, lighting fixtures. Is it possible to get a VA loan for the cost plus extra to finish it? (Scott Heiser)
A: Unfortunately, no, a VA lender is going to loan whichever is less between the appraised value and the purchase price. There isn’t a VA loan that allows you to add in rehab costs; in fact, the VA wants homes to be move-in ready, and issues like this typically have to be completed before a loan can close. You might want to explore the FHA 203k program, which allows you to build in those extra costs.
Building Your Own Home
Q: How does the VA loan work for purchasing property and building your own home? (Samantha Bellefeuille)
A: It’s tough to find VA lenders willing to actually do construction loans right now. It’s more common to get a short-term loan from the builder and then refinance that loan into a VA loan.
Checking a Spouse’s Credit
Q: Do all VA loans require the spouse’s SSN to run credit when it’s solely in the veteran’s name? (Jeremy Sackrider)
A: No, but if you live in a community property state lenders can and often will check the spouse’s credit.
Using VA Loans on Unique Properties
Q: Hello! Can VA loans help with building a dome home? We have done extensive research on this type of home. My Husband is getting out of the military in a couple of years and we are researching what needs to be done on either buying or building a home in a permanent location in Texas. We are going to be renting a year or so first to clear up some debts. Thank you, in advance! (Thelma Webb)
A: It’s possible, but the problem you’re likely to have is with the appraisal. This is such a unique structure that it’s unlikely there are other houses like this nearby for an appraiser to use for comparison.
Visit Veterans United’s VA loan education portal to read those guides or download a copy of my book on VA loans.
Photo courtesy of Madeleine_H