Here are 5 things I make sure all veterans know when buying or selling a home in Colorado:

Veterans are also know as the 1%’ers who have served their Country. While we are all different, us Veterans have a common bond that civilians don’t understand or have never experienced. We have been to many of the same places, shot many of the same weapons systems, enjoy telling stories of when we were in the service, and been to hell in back together. Many of these memories will remain with you for the rest of your life. We are given a DD-214 and a pat on the back, we don’t anything more. However, one of the greatest benefits you have, weather you know it or not, it is your VA loan. Purchasing a home with a VA loan has benefits that are second to none.Here are just a few:

1. No down payment for VA Loans

A conventional loan requires a buyer to put 20% down towards purchase a home. The Denver Metro area is one of the hottest real estate markets in the Country, with the average price of a home depending on the area, nearly a half a million dollars. Who has $100,000 laying around for a down payment on a $500,000? Veterans are able to purchase a home for no money down. I’ve even negotiated deals for Veteran buyers where they end up getting a check back at closing. 

2. No mortgage insurance for VA Loans

Buyers that use a conventional loan must put 20% down or they will have primarily mortgage insurance (PMI). PMI is a pesky fee that is added every month onto your mortgage payment. PMI payments can range from $30 on up to a few hundred dollars a month. This payment helps take some of the risk out of a transaction for the bank, when a buyer  doesn’t have 20%+ equity in the home which is achieved through a down payment. A veteran doesn’t need a down payment, but on the flip side, they don’t have PMI either. VA loans don’t require PMI even if you finance 100% of the loan and don’t have a down payment. 

3. No loan limits 

Fannie Mae and Freddy Mac set what is called loan limits every year, which fluctuate based on the average price of a home in an area. A buyer who uses a conventional loan and purchases over the County loan limit is pushed into a Jumbo loan. Jumbo loans typically have higher interest rates that loans that meet or stay under the loan limits. As of January 2020, VA loans no longer have loan limits. If you want to buy a $1,000,000+ house, you can now do so with a VA loan, finance 100% of it, with no down payment or mortgage insurance. 

4. Get creative, let someone else pay your mortgage

Veterans can use the VA loan to purchase a multi family home (up to a four-plex) with no money down. The veteran could obtain a VA loan, purchase a four-plex, live in one of the units and have three tenants in the other three units. The beauty in leveraging a VA loan to purchase a rental property is, the three tenants pay the mortgage on the four-plex and the Veteran can oftentimes live rent/mortgage free or even get paid to live there. This can all be done with no down payment. 

5. VA loans might not be competitive 

Denver has had one of the hottest real estate markets in the Country for a few year now. It’s not uncommon for multiple offers and a listing be sold over asking price.

When a buyer with a VA loan is up against a buyer with a conventional loan (20%+ down payment) the VA buyer could potentially be at disadvantage. One buyer has 20% in, while the VA buyer could potentially finance 100%. Are you a Veteran and want to avoid this situation? Call me and I’ll share how to avoid this situation.