10 Misconceptions About VA Loans
VA Entitlement guarantees 100% of an eligible borrower's mortgage.
The VA guarantees a portion of the loan - up to 25% - so that the borrower can avoid making a down payment.
The VA provides the funds for lenders to make VA loans.
The VA Guarantees the home loans that are made by lenders but dos not provide the funds or purchase the mortgage from the lender.
The VA mortgage entitlement can be used only once.
When the home securing the loan is sold and the loan paid off, the borrower's entitlement is restored for a future transaction. Veterans who had a VA loan in the past may still have remaining entitlement to use for another VA loan.
The VA limits the amount a buyer can borrow.
The VA does not limit loans, only a maximum that can be borrowed with zero down payment.
VA mortgages can be used only to purchase, not refinance.
The VA Interest Rate Reduction Loan (IRRL) enables refinancing.
The VA guarantees all service members qualify for a loan.
Borrowers must be credit worthy and meet the lender's criteria.
The VA guarantee will pay off the mortgage if the borrower dies.
The surviving spouse, co-borrower or deceased borrower's estate assumes responsibility for paying off the mortgage.
VA financing is always the best deal.
Usually, but not always. VA funding fees, in addition to the lender's fees, may make the VA loan the most expensive option.
VA financing is available only for single-family homes.
The property can be a condo, townhome, or manufactured home. It can even be a duplex, triplex, or quadplex if the borrower occupies one of the units.
VA purchasers cannot work with buyer's representatives.
VA purchasers may be represented by, but cannot compensate, buyer's representatives.
