Summary: VA loans come with a lot of perks for veteran homebuyers. This article will outline some tips for making it easier to secure this type of loan program for those who are eligible.
The VA loan is an incredibly useful resource for veterans and active duty service members everywhere. But with the inflated markets for both purchasing and renting near Joint Base Lewis-McChord (JBLM), military servicemembers stand to benefit in unique ways.
Use the VA Loan to Overcome Barriers to Purchasing Near Lewis-McChord
The VA loan allows qualified borrowers to purchase a sizable amount of home at an excellent rate when they might otherwise be forced to rent or purchase smaller. Because the Department of Veterans Affairs (VA) backs the loan, lenders will provide the mortgages with as little as no down payment at all.
Even though the Basic Allowance for Housing (BAH) increases to meet the demands of the local economy, base pay for military does not. Therefore, saving a little bit each month outside of the BAH won’t add up any quicker in Washington state than it would in an area with lower real estate prices. Because many active service members don’t have enough down payment saved for the expensive homes near Joint Base Lewis-McChord, the VA loan can provide an enormous advantage.
Understand Your Eligibility For No Down Payment
In previous years before 2020 rang in, veterans who were eligible for a VA loan had to adhere to specific loan limits in their respective counties. Loan limits are typically increased every year in order to accommodate housing price appreciation. Going over these loan limit amounts would translate to “jumbo loans,” which can come with more stringent lending criteria.
But while FHA and conventional loan limits still exist in 2020, VA loan limits do not. This is all thanks to the Blue Water Navy Vietnam Veterans Act of 2019 that was passed last June and states that VA loan limits are eliminated as of January 1, 2020.
As such, veterans are able to borrow much higher amounts without being subject to making down payments. Before this, any loan limits that were exceeded required an accompanying down payment. But now, veteran borrowers have more wiggle room when it comes to the loan amount they take out without having to fear the need to make a down payment. This is especially helpful in more expensive centers like Seattle and Redmond, where prices for homes are much higher than other parts of Washington State
Of course, borrowers will still have to prove to lenders that they have a decent credit score and an income level that is sufficient enough to handle the loan amount requested. Mortgage Lenders still have the power to limit the loan amount borrowed depending on the financial profile of each loan applicant.
Not only that, but any veteran applicant who is already carrying more than one VA loan or has missed payments on a previous VA loan that resulted in a default may still be subject to loan limits, or else must make a down payment.
You can obviously also purchase a home for much less as well. Because military families often move within a few years, you may choose to purchase a smaller home with excellent value in order to improve your ability to sell the home quickly when it is time for you to leave.
Or, if you plan to rent the home to tenants after you move away, you may want to make sure you can afford to pay the old mortgage in addition to a new mortgage if the home goes unoccupied for a month or two. All of these considerations are things you’d want to speak about directly with your loan officer.
Work With a Reputable Lender
Despite some companies branding themselves as “VA lenders,” you can work with nearly any mortgage company of your choice for your VA loan. You’ll want to make the choice of a lender based on customer service and your own personal values rather than any claims of VA preferential treatment.
Being in Washington state, a regional mortgage company operating in the Pacific Northwest company will also be more responsive to the unique needs and nuances of the area. There are advantages to working with a regional lender, but ultimately you’ll want to decide what suits you best.
Lastly, remember to hold your mortgage company to a high standard. There are also a number of impersonal call centers and automated systems for getting a VA loan, but they will rarely ensure your best interests. Because every single loan is different, you’ll want to work directly with a licensed loan officer who can help you manage a customize your transaction.
Want to Apply for the Program?
If you have questions about Washington State VA loans or other loan programs, we can help. Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington that has been providing borrowers with mortgage programs for over 25 years. We serve the entire state, as well as the broader Pacific Northwest region. Please contact us if you have mortgage-related questions.