5 Things You Didn’t Know about VA Loans
One of the numerous benefits afforded to us military folk is the VA Loan. You can go buy a property with a lower interest rate than other types of loans and almost no money down. This is absolutely huge! Right now a civilian needs to put down at least 20% if they don’t want to be paying extra for mortgage insurance.
1. The VA Is Not Funding Your Loan
A very common misconception among those beginning to look for a home is that the VA is going to fund your loan for you. This is incorrect. Whichever lender you are working with is going to be the actual institution giving you money, the VA is only guaranteeing to refund the lender a portion of their money if you default.
2. Once You Buy A Property You Don’t Have To Occupy Indefinitely
Industry standard is that once you purchase a property you have sixty days to move into it and you must reside there at least a year. The exception is for those who are still active duty. If you purchase a property and then receive orders to PCS a few months later, the VA has no issue with you moving out.
3. You Can Have More Than One VA Loan At The Same Time
You can have numerous VA loans at the same time. The main limiting factor is that the VA will only guarantee up to a certain amount. For 2015, this amount is $417,000. This means that if you purchase a home for $200,000 and then PCS to the other side of the country, you can purchase another home with a VA backed loan for up to $217,000!
4. You Can Rent Out Property Purchased With A VA Loan
If you PCS and decide to keep the home you purchased with your VA loan you have every right to rent it out once you move. Under the right circumstances this can be quite profitable.
5. You Can Use Your VA Loan To Purchase Income Producing Property
To be more specific, you can use your loan to purchase a residence for yourself that also happens to produce an income. Currently you can buy a duplex, triplex, or 4plex as long as you intend to occupy one of the units. This means you could buy a multifamily property, live in one unit, and rent out the others to pay your mortgage.
Overall the VA backed loan program is an amazing deal and something every Modern Military Man should look into.