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Buying a house using the VA Loan?
...anyone have any experience with this? My boyfriend and I are looking at purchasing a to-be-built townhome using the VA Loan. Did you have to pay anything out of pocket, or did you get everything rolled into the mortgage? Thanks!
Re: Buying a house using the VA Loan?
But, I do know that all we had to pay was $1000 to the builder, as like a securities deposit. We ended up getting like $850 or $700 back once everything was signed and we had our keys.
I believe the VA has a percentage limit that you're allowed to bring to closing (i.e. 10% of your total sale price). At least that's how it was when I worked on the resale side of real estate 6 + years ago.
Ask your lender for a Good Faith Estimate based on a VA loan...it'll break down every fee and cost associated with the loan, include the ones you pay out of pocket, at settlement and that are rolled into the loan.
We just closed on our house last month using H's VA loan. We had the seller pay 4% towards closing costs and had no problems with that.
I will say that it was a complete nightmare for us. Part of that was because H was only there to sign the beginning paperwork and then left for deployment and I did everything through POA. Also we were buying a house on the opposite side of the country. Basically you have to jump through a million hoops for the VA loan and they are constantly asking for more paperwork and more proof of things. But it all worked out and it is fantastic that we didn't have to pay any downpayment.
The only money we paid out of pocket was a $500 good faith deposit, $435 for the appraisal and credit check, and then $400 for our inspection. Then we got $560 back at closing.
We used a VA loan. We did pay some out of pocket. I don't know if we had to or if we did it to save some other money in the long run. I think there was some good faith money we had to pay and some closing costs in the end. I don't know all the details, but this is what I do remember:
We got married less than a month after we closed. Since we were not married when we purchased the house I could not be on the loan; only DH could be. There was a way around this, but I would have to give a gift basically of part of the downpayment(or that's what I understood of it anyway) and it seemed like it would get messy with taxes and blah blah blah so we just did the loan in his name.
The regular appraisal's came in around $7000 over asking price. We offered asking price with sellers paying all closing costs. They accepted then the VA appraisal came in $6500ish below our offer (so about $13500 less than the regular appraisals). We could only get a mortgage for the amount the VA appraised it at. This meant we either had to pay the difference between the appraisal and asking price or submit a new offer. In the long run it worked out fine though. We actually ended up getting the house for less than we originally offered!
I don't really remember much else sorry. DH took care of most of it.
We bought a house with the VA loan 2 years ago and the process was so simple. It was absolutely no different for us from when I bought on my own with a non-VA loan from the same lender (Wells Fargo). We got DH's certification letter, had it signed by his CC and notarized, and that was it.
I don't remember exactly what the fees were but we rolled them in and had no issues.
lol This exact issue came up when my friend was buying a house. The railing on the front porch steps was an issue with the VA; I don't remember how they resolved it, but it was a bit of a pain for them because the rest of the house was fine.
I'm scared now. We are using a VA loan and are set to close on the 16th. The inspector found a loose bracket on the stairs and put it in the report but we didn't ask the bank (its a foreclosure) to fix it because it literally just needs a few screws.....
So far for us the process has been fairly painless, we had to have a special POA that had the exact address since H is deployed. Everything really has gone very smoothly and I will be surprised if everything continues to go this well.
I will say that it probably completely depends on your loan processor and their experience. A lot of the problems we had were because we went through BofA and they now use a regional processing center. According to the loan adviser we went through in VA Beach there weren't nearly as many problems when loans were processed in the actual area where you were buying the house. So in an area like Norfolk/VA Beach where there are a ton of military the processors have a ton of VA loan experience. Now that they use the regional center the processors only see about 1% of their loans as VA loans.
The regional adviser had me in tears one day on the phone (I was already emotional from H leaving, I'm not that bad) because she was insisting that we needed a letter from H's employer explaining the penalties from withdrawing against his TSP. I told her that wasn't possible and I could get the penalties from online. She was insistent that online wasn't good enough and that I needed to get it from his boss. Finally after being in tears I said "I'm pretty sure Barack Obama is a little too busy to handle my request for this letter so I don't know what you expect me to do." But in the end, the online form was perfectly acceptable.
Just be ready to sign and scan whatever you need. If your FI is leaving for deployment during it make sure you get a special POA for home buying. Just be prepared for the unexpected, and know that little things can cause delays. We found out 4 days before closing that we would be delayed because the VA inspector found a problem with the septic tank. Luckily the seller fixed it and we didn't have to pay the large repair bill, but it still was a delay and more stress. That can happen with any loan though.
We are actually coming up on our 1 year anniversary in our house after using the VA loan. There is a ton of paper work and I had a bit more to deal with because my brother and I have Socials that are literally 1 digit off, and some of his student loans and a truck loan were coming up on my credit report. I will say I did pretty much everything solo, DH just signed where he needed to and showed up for the signing at closing. It wasn't so bad. We started the process the middle of February and closed March 18. There were a few little hiccups a long the way, I was getting papers faxed to my office hours before closing and after we signed there was another hiccup on the sellers end so it took an extra day but it wasn't that bad.
As far as restrictions, there can't be holes in the walls, or obvious dry rot issues with the roof and a few other thing. Our realtor told us if we really feel in love with a home that had issues we could come out of our own pockets to fix the issues before the inspection and appraisal. We didn't have this problem as our home had been completely remolded.
Good luck to you!
ETA: We went seven thousand over asking in our offer and asked 4% back for closing costs. Our only out of pocket costs were a $2000 good faith deposit, and $350ish for our inspection. Our appraisal was written into our closing costs. We got $1,600ish back from our good faith deposit.