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VA Loan Myths


Posted on: May 15, 2018

When you’re going through the process of buying a home, you tend to hear a lot of stories and “facts” from friends and family. Some of them are true – others, not so much.

Because of their complexity relative to other mortgage programs, VA loans are the subject of plenty of different myths. Some of these myths are based on truths, but what you hear can end up being very misleading, and it could be entirely untrue.

If you take some of these myths at face value without researching them, you could end up missing out on one of the best mortgage products available. Here’s the truth to some of the biggest myths surrounding VA loans:

Click to check today’s VA rates.

Myth #1: VA loans can only be used once

Because of how useful VA loans can be, some people believe that they’re too good to be true. The myth that VA loans can only be used once is completely false, but it’s easy to see why people might think this. If you currently have a VA loan, you are not eligible for a second one.

However, this doesn’t mean you aren’t eligible for a second VA loan.

Once you pay off your current VA loan, you’re eligible to use the program again. There are some small differences after the first time, such as a slightly higher at closing. But aside from the small differences, your second VA loan will be similar to the first one that you paid off.

Myth #2: VA members are guaranteed a mortgage

Nobody is guaranteed any type of mortgage, regardless of which mortgage program they’re applying for or if they’re veterans. You have to be approved for a mortgage, and that means meeting credit requirements, a specific debt-to-income ratio and other factors, depending on the program you choose.

When a lender says that a VA loan is “guaranteed,” they mean that the VA backs the loan. The VA guarantee is there to tell veterans that they can get a mortgage with no required downpayment, competitive mortgage rates and other benefits.

You can learn more about what “guaranteed” means here.

Myth #3: VA appraisals are impossible to pass

There is a bit of truth in this myth. That being said, VA appraisals are not impossible to pass.

It is true that VA appraisals can be stricter than an appraisal with a different mortgage type. However, that doesn’t mean they’re impossible to pass, and many VA home buyers don’t have any trouble with the VA appraisal at all.

If you are applying for a VA loan and want to have a quick, speedy appraisal process, check here for some tips on how to pass the appraisal.

Check your VA eligibility.

Myth #4: Today’s home prices require a higher downpayment

There’s no denying that home prices have increased over the past decade. This has made homes harder to afford for many would-be home buyers, since downpayments are usually used to lower the costs of monthly payments. The higher the downpayment, the lower the monthly payments.

Here’s the truth: with a VA loan, you don’t need to make a downpayment and you can still afford a house. The key to buying an affordable home isn’t the size of the downpayment, but finding a home that’s within your means.

Plenty of VA members purchase a home without a large downpayment. In March, the average downpayment for a VA loan was just two percent – below the minimum of 3.5% required by FHA loans, and much lower than the traditional 20%.

While a larger downpayment will lower your monthly costs, you probably don’t need to make a larger downpayment to be eligible for a VA loan.

Myth #5: VA loans take forever

There is some truth to this myth. When comparing FHA loans, conventional loans and VA loans, VA loans are typically the slowest program. According to mortgage software giant Ellie Mae, VA loans took an average of 46 days to close during a 90-day period.

By comparison, FHA loans took 43 days to close, and conventional loans took an average of 42 days.

So yes, a VA loan is likely going to take longer to close than another program. However, a difference of 3-4 days is small when you recognize how much lower VA rates are. Also, you won’t be required to make a downpayment with a VA loan.

VA loans are slower than other mortgage types, but they do not take forever.

Click to start the VA home buying process.