VA Loans Myths vs. Facts

The VA loan is one of the most amazing loan programs (one of our favorites) and provides some incredible benefits to qualified service member borrowers. Unfortunately, the VA loan is also known for having a stereotype, especially with first-time homebuyers—or first-time sellers—because of the many myths and lies that exist that are perpetuated by the internet and other misinformed lenders and Realtors.  

We rounded up some of the more commonly known myths about the VA loan that we hear and see constantly from homebuyers, realtors, and even on online forums! If you’re a home buyer who qualifies for the VA loan, a Realtor, or a seller you’re going to want to read this! 

Myth: VA Loans Take Longer to Close 

We will dispute this one until we are blue in the face! It is absolutely NOT true that VA loans will always take longer to close – the only “truth” to this myth is if you’re working with a lender who is unfamiliar with VA loans or doesn’t have an underwriter who can approve them or is an on-line lender that always takes forever. Find a lender who is familiar with VA loans and works with Veterans all the time, and we can guarantee your loan will not and should not take more than 30 days to close. If you’re in Iowa, we have an underwriter right in our office who approves VA loans all the time, and we can even get them closed within two weeks if we have to— we have before! 

Do not believe a Realtor or a lender when they tell you to avoid using a VA loan because of the time it takes to close—they simply don’t know what they are talking about, and it is a sign to get a second opinion from another lender! It’s all about who you work with. 

Sellers- don’t refuse offers from buyers using VA loans just because you’re worried about a longer closing period. VA loans shouldn’t take any longer to close than a Conventional loan, don’t listen to the stereotype from misguided Realtors and count out a great offer just because it’s a VA loan. 

Myth: VA Loans are More Expensive 

We have had buyers come in who have heard that VA loans are actually more expensive than Conventional loans, so the benefits aren’t “worth it.” 

We have also heard of lenders telling buyers that a VA loan isn’t a good option because the fees are too high. Neither of these myths are true! If you’re worried about the VA funding fee, know this: it is a one-time payment, and the benefits of a VA loan often outweigh the upfront costs, especially in the long run. Not to mention, if you have a 10% or greater service-connected disability, the VA funding fee is waived. 

 VA loans do not require ANY down payment. You can put money down if you want to, but it is not required. There is also NO monthly mortgage insurance; Conventional loans do require PMI with less than 20% down. VA loans typically have between .25% to .5% lower interest rate than a Conventional loan, which can add up to a lot of money saved for buyers over a 30-year fixed rate mortgage. The truth is, a lot of veterans will still choose a VA loan over a Conventional loan, even if they do have 20% to put down, because of the lower interest rate! 

So no, a VA loan does not have any features or fees that would inherently make it any more expensive than any other loan option with a similar down payment (in fact, the end monthly payment would likely be less with a lower interest rate and no PMI), AND it usually gets you into the home for much less upfront because you don’t even need to pay that down payment! 

If you’re unsure about your loan options, come and talk to us and ask us any questions! We’ll be able to calculate your monthly payment for you and address any questions or concerns you have, but we can tell you this: VA loans are not “more expensive” than other loan options. 

Myth: VA Doesn’t Allow for New Construction Purchases

Not true! Veterans that want to purchase a home that is new may do so! The biggest misconception there has to do with the VA Builder ID. A builder has to apply for one and has a little bit of paperwork to fill out. We can help with that, of course, and once they do have a builder ID, they have it forever, it’s a one time process. Some lenders, especially when they broker their VA loans, cannot handle new construction because they don’t know how to get the builder ID. Just reach out, or have your builder reach out, and we can walk them through it. 

Myth: You Can’t Get a Condo Project Approved With a VA Loan 

It’s very possible to get condo projects approved and approved quickly when you’re working with the right lenders. Anyone who tells you it’s impossible is wrong—and you should run in the other direction! There is no rule or clause anywhere that states that condo projects do not qualify for VA loans, but this myth is perpetuated because it can take longer with lenders who aren’t familiar with the process. 

At RMN, for example, we have a good rapport with the VA panel and have a process in place specifically for VA condo project approvals, so it’s not difficult for us at all to get one approved. 

If you’re interested in a condo project and qualify for a VA loan—let’s talk!

Myth: VA Loans Require Too Many Repairs

Sometimes, Realtors can psych sellers out by telling them not to accept a VA loan because of all the “necessary repairs,” which freaks out buyers from using a VA loan in the first place! 

Here’s the truth: the vast majority of VA loans we close do NOT require repairs! So, this is not a good reason to shy away from doing a VA loan. And sellers should keep this in mind, as well, because most of the time, repairs are a non-issue. 

Even if there are required repairs, it is usually something that would’ve been flagged by a home inspection anyway! But again, these repairs are usually a nonissue. And as a borrower, you can work with your Realtor and a knowledgeable lender (like us) to make sure you are avoiding these repairs when looking at homes -or you are prepared with what to look for and how to make the deal continue to work out. 

The best part about working with a lender like RMN is that we are happy to discuss any concerns upfront before you even make or accept an offer! If we don’t know the answer, we will contact one of our trusted appraisers to get one. Not all lenders are willing or able to do this—one more reason why working with a local, experienced VA lender is key to a smooth transaction. 

If you have any more concerns about the VA loan or have heard yet another rumor or myth that you’d like us to address, don’t hesitate to reach out. We love doing VA loans—and we know the ins and outs because we do them all of the time! Since 1987!