Hey. Rick Elmendorf here.
I thought it would be proper to do a series on all of the topics that surround VA lending and loans.
This is a pretty important topic for me personally because there is so much bad information out there regarding VA loans and lending! I want to help you cut through the bad information and get what you need in order to take full advantage of your VA loan eligibility.
So, I decided to launch this series—The Five Key Advantages of VA Loans—and today I'm going to discuss the very first topic: no money down. I know what you are thinking … VA loans don't require down payment … but I'm going to put a little bit of a different spin on this because there are so many things that people don't know when it comes to this topic.
This year had a big development as the VA removed the ceiling cap of the loan limits and how large of a VA loan you can get. Now, if you have full entitlement, which means your VA loan is not tied up on another loan, you can basically go up to whatever loan amount you want with no money down.
That’s amazing news! Ten million dollar loan, no money down, no problem. Five million dollar loan, no problem. One of the caveats, however, is that the funding fees were increased. I won't get into the weeds too much on that right now, but it’s important to remember the “no money down” part.
Remember, if you have a VA disability rating, you do not have to pay the funding fee. This is probably another important topic I don't have time to go into today, but make sure to check and see that you're not paying your funding fee if you have a VA disability rating or are in the process of getting a VA disability rating. FYI, there is a little trick you can do to get a memo rating that helps you avoid paying the funding fee, but that's for another day!
Let's get back to the main topic of no money down on your VA loan. We already know that if you have full entitlement, you can use your VA benefits up to 100 percent. But what if you have your VA entitlement tied up? The VA still goes back to the old rules—they look at the county loan limit. They also look at how much entitlement you have remaining. So basically, when you get a VA loan, you get charged the entitlement. You then can use whatever remaining entitlement is left over, and that remaining entitlement is calculated by the county loan limits. So, it's a little confusing, but the VA does have a formula here for you.
The point is this: don't let anybody tell you that you can't get 100 percent financing because your VA benefits are tied up. That is dead wrong!
In many counties across the country, you can still make up the delta between the maximum VA loan that you can get and 100 percent of the sales price. There's a little trick to that, and it comes in the form of a home equity line of credit that you can take to make up that delta between the maximum VA loan up to 100 percent.
So if you'd like to find out more information, go to schedule a time to talk to me, and I can certainly talk to you about this no-money-down option ASAP.