Myths about VA Home Loan Rates and Other Untruths

Myths about VA Home Loan Rates and Other Untruths

Myths about VA Home Loan Rates and Other Untruths

Common misconceptions and myths about VA-backed loans

Misconception: Down payments and credit score requirements prevent one from obtaining a VA-backed home loan.

Reality: While lenders may require a down payment or minimum credit score, the VA itself doesn’t require a specific one. The decision is, ultimately, left to the authority of the lender – meaning that the assumption of a down payment or minimum credit score being required may be misguided.

Misconception: VA home-loans are only for honorably discharged veterans.

Reality: Not quite. VA-backed home loans may be available to active duty servicemembers, some reservists/guardsmen, and (in some circumstances) a veteran or servicemember’s spouse.

Misconception: The VA limits loan amounts and property values for VA-backed loans.

Reality: Not quite. The VA has a limit on the maximum amount of the loan they will guaranty/back, but the actual value of the property isn’t restricted by this limit.

Misconception: VA-backed home loans don’t have competitive rates compared to other mortgages.

Reality: Quite the opposite. The VA’s backing provides a level of security lenders rarely enjoy, and based on this many lenders provide very competitive/favorable rates for qualifying veterans and servicemembers.

Misconception: VA-backed home loans can only be used to purchased traditional, single-structure housing.

Reality: VA-backed home loans can be used to purchase many types of properties: homes, some condos, manufactured homes, etc.

Misconception: VA-backed loans cannot be refinanced easily/effectively.

Reality: The VA allows for Interest Rate Reduction Refinancing Loans (IRRRL’s) – which are streamlined in an effort to allow veterans and servicemembers who qualify to obtain better interest rates via refinancing.

1 Comment
  • Tori Raddison
    Posted at 21:49h, 26 February Reply

    It’s awesome that you can use VA loans can be used to buy many types of properties because that means you can buy something that’s more in your budget. I need to tell my brother because he’s eligible for a VA loan! He’s been wanting to get his own place for a while.

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