Here’s a transcript of the VA Loan Live Hangout from Oct. 1, 2013.
Sarah: Now, for introductions, we have Barby Wulff. (Veterans United Home Loans, Barby Wulff, Loan Officer, NMLS: 177100 P:  814-1103 ext. 3247, E: firstname.lastname@example.org). She is a Loan Officer at Veterans United Home Loans. Thanks so much for joining us.
Barby: Thank you. Happy to be here.
Sarah: And Ladies in red, I tell you I must not have gotten the memo. Samantha Reeves (NMLS #: 957799), she’s our Senior Mortgage Writer for Veterans United Home Loans. Thanks so much for joining us.
Samantha: Thank you.
Sarah: Lots of questions that we want to get to this evening. First off, who should borrowers talk to first? Should they talk to their lender or should they talk to their real estate agent?
Barby: They should definitely talk to their lender first. Nine times out of ten when you reach out to a real estate agent they’re going to ask if your financing is in place. They’re going to generally say, “Are you preapproved?” They’re going to want to know that you’ve done your due diligence in arranging for financing. That way, once you find the right home you can write an offer and let the seller know your financing is ready to go; you’re ready for a contract.
Sarah: People are also asking about home inspections and why they need home inspections. Why are they important, Samantha?
Samantha: That’s a really good question, because a lot of time I think people believe that home inspections and the appraisal are just kind of redundant when really they’re two different processes. The appraisal is kind of a broad spectrum. They’ll look in each one of the rooms, but the home inspection they’re going to look down in the corners, in the vents; just everywhere to look for thing little things that could possibly be wrong or make your home unsafe. It’s really important to get both the home inspection and the appraisal. The appraisals require, the home inspection isn’t but it’s really strongly recommended that you get that.
Sarah: All right, some more questions from borrowers. This borrower asks for Barby. The one thing I am running into is that no one wants to accept a VA Loan. The VA Loan is the last on the list that seller’s will take making it hard for veterans to buy a house unless they have cash.
Barby: This is a very, very good question. That’s something that we run into a lot especially in very competitive markets. From a seller’s perspective, and I always tell perspective borrowers I’m working with, if you’re a seller in an area where you’re going to get multiple offers, nine times out of ten you’re going to look at that and take cash, conventional and then government for a number of reasons. We do routinely get contracts accepted in those competitive areas, but it does take a little extra leg work and a lot of times it takes numerous offers. Nine times out of ten I will interject with a buyer’s agent and request that the listing agent speak with me and let me just give them some information to let them know that this is not a government loan because it’s a higher risk borrower. It’s a government loan because this veteran served our country and they’re taking advantage of their benefit. That has allowed me to win some contracts, so keep your chin up and just don’t get attached until the contract is accepted. That is a common thing we run into in a competitive market.
Sarah: I have another borrower asking about a VA Loan to cover the cost of the floors and attic conversion that they’re doing. If the house will be low appraised value, what would you have to say to that as far as …?
Barby: We are allowed to loan 100% of the appraised value and the purchase price. Unfortunately, even if it appraises for more than you’re purchasing it for we can only loan the purchase price, but we definitely cannot go over that appraised value.
Sarah: What about using a VA Loan when I am looking at buying a repo or short-sale?
Barby: We routinely close loans on foreclosed homes and on short-sale properties. The short-sale process does elongate the buying process quite a bit and can add anywhere from two to nine months to the process depending on the selling lender. We close loans all the time with short sales and foreclosures.
Sarah: A reminder you’re watching a conversation with Veteran United Home Loans. We’re talking about how you can use your VA benefit in order to purchase a house. We have Loan Officer Barby Wulff here and also Samantha Reeves, our Senior Mortgage Writer, so appreciate you all sharing your expertise with us. The VA Loan, talking more about that. Does this apply to the VA Business Loan and they’re asking about business loans.
Samantha: The VA Home Loan is strictly for your primary residence, so it’s not going to be for a business loan or anything like that. What you’d want to do is first consider is this a home that you intend on moving into pretty quickly and it’s not something that you can buy and then move into two years from now. It’s something you need to buy and intend to occupy right away. If that’s going to be your primary residence then you do have a couple options there. I mean you can so a single family residence. You can even up to a four-plex where you’re occupying one of those units. You have several different options available, but it’s not a business loan; it’s for your primary residence.
Sarah: Another question, I guess my question would be that me and my wife would be first time homebuyers. How would I start the process of obtaining a VA Certificate? If it matters, they say, I’m a reservist and an Afghan War vet.
Barby: The initial process definitely be a phone call to a licensed VA specialist. I typically go through an application 15 minutes sometimes 20 minutes on the phone. We can basically start the process and find out if we meet the minimum qualifications necessary. This sounds like he would be VA eligible probably for Title X orders, so either six years as a reservist or if he has his Title X orders then it sounds like we would have no problem getting the Certificate of Eligibility. Your licensed Loan Officer will get that Certificate of Eligibility for you as part of the process.
Sarah: How do people contact you? How do they get a hold of you?
Barby: They can actually reach me at 800-814-1103 and my direct extension is 3247.
Sarah: Okay, Barby Wulff gives that out one more time.
Barby: It’s 800-814-1103; my direct extension is 3247.
Sarah: A lot of borrowers asking about impartments on their home and remodeling. This particular borrower says I’ve been wanting to do some improvements can I use my VA Certificate for this or do I have to go a different route?
Samantha: Yeah, that’s a really good question. I think it depends on if you are purchasing a home to start off with of if you want to refinance your current home. If our purchasing really the only option to make improvements that you have there is an energy-efficient mortgage. That will allow you to take generally up to $6,000 for energy efficient improvements to the home, structural improvements not just appliances and things like that.
Now, if you own the home and you’re wanting to make some updates then you can do one of our VA refinances and that’s going to be a cash out refi or a streamline. Those different options, I guess the streamline actually you wouldn’t use just for construction loan, you’d want to use the cash out for that, but there are two options for VA Refi’s. The cash out refi is going to allow you to take cash out and with that you can use it to remodel. You could do a debt consolidation; you have lots of different options there.
Sarah: What if I have a poor credit score or if I have a disability? What are the options for that borrower?
Barby: The qualification options would be a 620 middle credit score, so both the veteran and the veteran’s spouse, if there is a spouse that’s going to be a co-borrower, they both have to meet that minimum 620 credit score requirement. If the score is not there, if there are certain challenges on the credit, we do have out Lighthouse Program that works with borrowers. It’s no charge to the veteran. They will work with you and give you some tools and resources to improve your credit so that we can get you up to that 620 middle credit score and get you into a loan in the future.
Sarah: Okay, we’re seeing that contact information right now for the Lighthouse Program. That’s’ 1-888-392-7421. You can also reach out to our Lighthouse Program.
A borrower asking about what does the Certificate of Eligibility get you?
Barby: That means that you are eligible for a VA loan and that is a common question that we get a lot. That means that you’re eligible for a VA Loan, again 100 percent financing with no mortgage insurance. It is truly the only way to get 100 percent financing now in today’s lending market. In terms of what that gets you, it gets you into basically to be eligible for the program but you do still have to meet some basic qualification requirements, being the 620 middle credit score, two years in the same line of work and no bankruptcies or foreclosures in the most recent 24 months. We want to show that you have no lates on your mortgage in the most recent 12 months.
Sarah: What does a Certificate of Eligibility get you? It gets you a call from Barby Wulff. Right?
Barby: Yes, absolutely.
Sarah: And Veterans United Home Loans. What about the fees? Let’s talk a little about the fees. What fees are covered by the VA Loan which should not be charged to us by the lender?
Barby: There are a list of what’s considered to be VA non-allowable fees which is I think what this question is referencing in particular. Those fees aren’t necessarily that they cannot be charged; they just cannot be paid by the veteran. In most situations we’ll structure a contract to where the seller is paying those closing costs. If the seller’s not paying them sometimes we pay them as the lender. There’s a couple different ways we can structure the contract.
Sarah: Sounds good. If you just joined us we’re having a conversation with Barby Wulff. Loan Officer for Veterans Unite Home Loans, also Samantha Reeves, she is a senior mortgage writer for Veterans United Home Loans. Talking a little bit about no money down; one of the benefits of the VA Home Loan Program. My husband and I want to purchase a home using the VA Guarantee. What do we need to do to prequalify? Can we really purchase with no money down? Can we really purchase with no money down with this?
Barby: Yes and that is a huge part of the benefit is the VA Program allows us to structure that purchase contract with the seller paying all of the closing costs and prepaid items. A lot of my borrowers come into the closing transaction with less than $1,000 total investment. There’s an earnest money deposit. There’s the VA appraisal that we mentioned earlier and the home inspection. There are some costs along the way that we do have the ability to structure that contract with the seller paying those costs. I do always stress to the borrower you’re including that in the purchase price when the contract is written that way, but it is part of the benefit so that you can get into the home with very little money out of your pocket.
Samantha: I’d also note there’s a difference between closing costs which are a lot of the things that Barby is talking about your appraisal, things like that and a down payment. A down payment is just a chunk of money that you’re putting towards the principal of the loan and VA loans are zero down payment required. That doesn’t mean that there’s no cost involved, like she said. There are some costs that you may incur, but also, like Barby said, it’s really possible to structure most of those, if not all of them, into the closing costs, having the seller pay those.
Sarah: Will the VA do a purchase and a remodel all in one loan? All together?
Barby: No, there is a program by FHA that is a FHA rehab loan. However, the VA doesn’t offer an actual rehab loan.
Sarah: Also, borrowers asking about poor credit scores, does that mean that he cannot get a loan for a home, and you talked a little bit about the Lighthouse Project.
Barby: Yes, please give me a call and we’ll go through an application, start the process and see where your credit score’s at at the time and, like I said, if it’s not there now we’ll work with you until we get it there.
Sarah: Real estate agents, let’s talk about real estate agents. A borrower is asking about what kind of qualities should they look for in a real estate agent. Where do they find a real estate agent who are experts on VA loans?
Samantha: Yeah, real estate agents are really important and key to the transaction. I mean they’re going to be the ones that are what we call are boots on the ground. They’re the ones out there showing you the houses. They’re going to see the house possibly even before you do. It’s really important to have a real estate agent that is knowledgeable with the VA loan. When talking with Barby or any of our other Loan Officers, they’re going to be able to get you set up with a VA specialized agent if you don’t have one already. Plenty of times we go through and talk with our agents on the phone and educate them about the VA loan throughout the process. If you’re just now looking you want to find someone that knows the VA loan, knows those requirements and is willing to work with you and has the time available that you do, as well as someone who you feel like you’re able to spend a lot of time with because you’re going to be with them looking at houses possibly entire weekends, evenings until you find that home of your dreams.
Barby: I would add to that I do stress and I get this question a lot from borrowers is they will say can’t I just call the real estate agent that I see listed on the listing? I always tell them it is to your advantage to use a buyer’s agent. Obviously working with someone that has VA knowledge and VA experience in negotiating VA contracts is going to be to your advantage as far as a smooth process. The real estate agent fees are always paid for by the seller, so if you reach out to that listing agent they work for the seller. The seller hired them to list the home and they will do a very good job, but it is always to your advantage to have someone in your corner throughout negotiations and throughout the contract process.
Sarah: Let’s talk about where we find Veterans United Realty and that’s 1-800-844-5560, 800-844-5560 I’d you’re starting the process and you want to connect with a realtor who knows about VA loans. Let’s talk a little bit about refinancing homes. Are there resources out there that would help borrowers determine if they have equity in order to do a VA refinance?
Barby: There are and this something we get a lot of calls on. Probably the most common question that is get is I looked my house up on Zillow. How accurate is that? Zillow is a very common website that people use to determine value, but it’s definitely not an exact science. The program Zillow will put a bull’s eye on the property and move out from there and pick up all sales that are reported in that MLS. It doesn’t have the ability to account for differences with age or square footage and things like that. While it is a good reference point it’s definitely not going to say this is what my house is worth.
Samantha: I think a lot of the times they just look at the home the last time it sold. I know personally my house, we bought land and bulldozed the house before it, but when I look it up on Zillow it’s the old house. It’s like there’s this little bitty shack on there and I’m like that’s not my house.
Barby: It’s only as good as the information that’s input into the system in that area.
Samantha: Yes, exactly.
Barby: It can be a good tool, but it’s definitely not an exact science.
Sarah: The benefits of VA loans versus conventional loans; lots of choices out there. In order to get a mortgage what’s the benefit of a VA loan as opposed to getting it from a conventional lender.
Barby: The guidelines are much more relaxed on the VA Loan Program. Of course, the biggest benefit is the 100% purchase program and the ability to get into a home with very little money out of your pocket.
Sarah: Does that surprise people as far as the guidelines relax? When you talk about the relaxed guidelines does that sometimes surprise people?
Barby: It does. Really the conventional guidelines are much more strict than they used to be and while we do have quite a few guidelines to follow, being a government insured loan, they are still relaxes in terms of credit score requirements, debt-to-income ratio and things like that.
Sarah: Is the VA funding fee a one-time fee this borrower is asking.
Barby: It is a one-time fee that is financed over the life of the loan most of the time. It’s not something that they have to bring to closing. Then if someone has a service connected disability of 10% or greater then that fee is completely waived.
Sarah: Got you. Barby Wulff, Samantha Reeves we so appreciate you joining us. A reminder the conversation doesn’t end here it continues, so if you have a question for Barby Wulff we will be happy to pass it along to her and get those questions answered. If you go to vu.com/valoanlive. We’re watching that and we’re happy to answer our questions. Before we go, please give out your contact information where people know to get in touch with you.
Sarah: A wealth of information here with Barby Wulff.
Barby: Sure, thank you. You can reach me at 1-880-814-1103 and my direct extension is 3247 or you can e-mail me. I think my e-mail address is on the screen and its super easy. It’s just email@example.com.
Sarah: That’s Wulff, W-U-L-F-F at vu.com. firstname.lastname@example.org.
We’ve talked a lot about a lot of great programs within Veterans United Home Loans. We talked about the Lighthouse Programs for individuals who might not credit qualify and we also talked about the Veterans United Realty as well and resources there. I also want to mention the book. The man who wrote the book on VA loans, Chris Birk would love to give that to you as well if you go to vu.com/book. You can get more information, great resources in there.
Great resources with us tonight, thank you so much for joining us. We appreciate your time and good luck it you in your home buying endeavor. I’m Sarah Hill. You’ve been watching the Veterans United Network and again if you have a question about VA loans you can go to vu.com/valoanlive. Have a great night.