Statistics show that of all the service members and veterans eligible for a VA loan, only 12% utilize this extremely helpful tool. I would argue that the availability of the VA loan is one of the most compelling reasons to consider buying a house and starting your road to savings and wealth! So why don’t more people take advantage of their VA loan benefit? Lack of knowledge and resources. While I am not a mortgage lender or tax professional, I am passionate about helping military families understand their benefits, so let’s get started.
The VA loan differs from a conventional loan in many ways. One of the biggest barriers to entry for getting a home loan is the often-required 10-20% down payment. However, when using your VA loan benefit, you don't have to put any money down!
If it is your first time using a VA loan, you pay a funding fee, which is calculated as a percentage of the loan and is paid at the time of closing or, rolled into the loan balance. For first time VA loan users, it is 2.3% of the loan amount. For subsequent uses of the VA loan, it is 3.6%. So when you use your VA loan, you have the ability to buy a house without having to pay any money up front!
Another benefit when using the VA loan is that you can often access much lower interest rates than with a conventional loan. This makes a huge difference in the amount of interest you pay over the life of the loan, and also lowers your monthly payment. With interest rates at record-lows right now, this alone could save you thousands of dollars over your time of ownership. If you’re looking for a great lender,
I work with a few great lenders on the island that are able to close a loan in 30-45 days, allowing YOU more time to find a house! Most people assume they only have a week or two upon arrive on the island to find a house in order to close before their 60 maximum TLA is up, but that isn't the case. Being able to close your loan in shorter time allows for you to settle into your new city, explore all of your options and areas, and really get a feel for where you want to live.
Let's break down the process of getting your VA loan
When you decide to start your house search, it is useful to get pre-approved with a lender. This doesn't necessarily have to be the lender you work with to secure your loan, but it is helpful to know what your interest rate might get and to know what your price point is for shopping for you home. Once you are pre-approved, you can start your house search! It truly is that simple. Typically a lender can get you pre-approved with hardly any wait after you provide a few documents, which are listed here:
Date of birth
Current bank statement
Orders to Hawaii
Federal tax returns for the last two years
Ages of any dependents
Two more recent addresses, and duration spent at addresses