This is a very interesting topic right now, in Denver. I am hearing over and over again, that some Real Estate agents feel their buyer’s offer will be “less competitive” if it is a VA loan they use to buy with. WOW! That is the first thing that comes to my mind. Why is that? is what I am curious to know?
I have been told numerous things from, it is because of the “No money down option“. I am told “there is no appraisal deadline per the Colorado Real Estate Contract“. And I have been told “The VA inspector…..”
So let me break these apart one by one. One, The “No Money Down” aspects of a VA loan. A Veteran has earned the right to put no money down should they choose to. The program offers lower interest rates than Conventional mortgages and has no mortgage insurance as well. So tell me; if you could choose to put no money down, and have no mortgage insurance would you want that? Great, sign up and serve in the military, sacrifice for your country so folks have the “ability” to buy and sell homes. Yes folks, without our Veterans you may not have a house or freedom to buy a home here in Denver folks. We all get that and love our Veterans, so why not support then in wanting to buy a home?
Two, “No appraisal deadline“- This was written into the Colorado Real Estate contract by DORA not the VA loan guides. So do you run a risk should you accept a VA offer to buy your house in Denver? Let’s think about this; could someone with a conventional mortgage buying your home cancel because of the appraisal, and their lender tell you their loan was denied? Sure, why not. Not too mention conventional appraisals are now monitored by Fannie Mae’s Collateral Underwriter. In short, the appraisals for Conventional mortgages go through a much more rigorous review for accuracy, value, comparable sales than a VA appraisal does. So you actually run a higher risk of a value issue after the appraisal when this appraisal is run through the Fannie Mae Collateral Underwriter software. So in short, a VA appraisal is less involved, and will be done faster than a regular appraisal since the VA mandates how fast the VA appraiser has to finish the report.
Three, “The VA inspector…”- I have heard s/he hangs out with the Easter Bunny, Santa, and Jim Morrison. Oh wait none of those people have been seen, because they aren’t alive. Spoiler alert; there is no VA inspector. Yes, the VA has minimum property requirements. It goes like this; safe, sound, sanitary. So if you are selling an unsafe, unsanitary home then the VA appraiser will shed light on this. But odds are 100% that this will be brought up in the home inspection the buyer does; whether VA, Conventional, or FHA financing is being used. So it is not a “VA thing”. Here is a short list of what is important- Roof- visual check, peeling paint (houses <1978- this is an E.P.A thing not VA folks), missing hand rails, tripping hazards, dangling wires, mechanical systems (safe w/ reasonable future utility), heating (adequate), water (continual supply of potable water), safe method of sewage disposal, crawl space (adequate access, clear of debris, properly vented), electricity (yes), adequate space between buildings to permit exterior maintenance of exterior walls. Doesn’t sound like too much for accepting a VA offer to buy your home, does it? These items will likely be hashed out in inspection (not a VA inspector, rather a home inspector) prior to the appraisal being completed.
I hope this helps to dispel the myth that a VA loan is less competitive right now in Denver than a Conventional Mortgage. In all honesty shouldn’t the Veteran (buyer) be able to select what financial terms are best for their family?
If you are a Veteran, and want to work with a Veteran to obtain your next home loan in Denver, let me know. I would be honored to help you as one Vet to another, it would be my privilege. Click here to apply now, and I will be in touch. Not too mention help to get your offer accepted as well.
Ray Williams, Branch Manager, Mortgage Maestro Group @ Summit Mortgage