NMP - November 2019 - 60

special focus on A SALUTE TO THE HEROES OF HOMEOWNERSHIP a special focus on A

Selling VA Loans Starts With Vision
By Brian Koss

ery few people
and organizations
achieve greatness
by accident. For
most, success
begins with
having a vision-an idea of
where you want to be, not
where you are today. But once
you have a vision, you need to
know the steps it takes a
achieve it.
When it comes to VA
lending, the distinction
between lenders that have had
success with military
borrowers and the ones that
have not is very clear. The
reality is that relatively few
mortgage lenders are doing a
good job helping veterans and
military servicemembers take
advantage of their hard-earned
VA loan benefits. The ones that
have found success with VA
loans, on the other hand, have
done so because they started
with a vision-a vision built
around the fact that VA loans
are different than all other loan
products, and require unique
resources and skills.
Any mortgage lender is
capable of providing the
training, expertise and
resources needed to help
mortgage professionals assist
those who have served use
their military benefits. And
there is no better time to do so
than now.

V

NOVEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

60

Why VA loans are so
important
VA loans have gained a lot of
popularity in recent years, and
for good reason. These loans
allow eligible veterans to
finance a home purchase, or to
refinance a loan, with no
money down and no private
mortgage insurance. Apart
from the USDA rural lending
program, there is no better
deal for veterans looking to
buy a home on the market
today than VA loans. The next
most flexible federally-insured
loan product is FHA, which still
requires a downpayment of 3.5
percent. Another good reason
to get into VA lending is that
the U.S. Department of
Veterans Affairs plans to raise
VA loan limits beginning in

"The key to successfully selling VA loans is not to dabble in them. The
commitment begins with being a VA certified lender, training loan
officers to be subject matter experts in VA loans, and providing the
resources the organization needs to succeed, so everyone is in
alignment."
2020 to $484,350 in most U.S.
counties.
Traditionally, VA loans have
been very underutilized, but
that is starting to change.
According to the Consumer
Financial Protection Bureau
(CFPB), the percentage of
servicemembers who have
taken advantage of the VA loan
program has soared from 30
percent in 2007 to 78 percent
by 2016. That's great news, but
it's also an indicator that these
loans still aren't used as much
as they could be.
One of the major reasons
holding VA loans back is the
fact that there are many false
assumptions and
misconceptions about them.
For example, many people
think they are for first-time
homebuyers and can only be
used once, which is not true.
Eligible veterans can use their
VA benefits throughout their
lifetime. We have had
borrowers who were in their
70s, lost their homes during the

2008 recession, and were able
to use their VA benefit again to
buy a decent place to live for
their remaining years-with no
money down. Eligible spouses
can use this benefit, too.
One group that many
mistakenly believe do not
qualify for VA loans are those
who serve part time in the
National Guard. While they may
not be active duty soldiers,
members of the National Guard
can qualify for VA loan benefits
after six years of service.
Other myths about VA loans
persist-such as the belief that
there is a minimum credit score
required. There isn't-although
most lenders have their own
guidelines that range between
580 and 640, and rates can
vary depending on a borrower's
score. There are also no
minimum debt-to-income ratios
required, although most lenders
have their own guidelines here
as well.
Another misconception about
VA loans is that they take

forever to close. It is true that,
on average, VA loans take
longer than FHA and
conforming loans, but not by
much. According to loan
statistics from Ellie Mae, in
February of this year, the
average VA purchase loan
typically closed within 49 days,
compared to 47 days for FHA
loans.
Many people also believe VA
loans are difficult to originate
and not worth the trouble. It's
true that there is a good deal
of paperwork involved, as well
as some nuances that can be
challenging. VA loans are not
difficult, but they are a little
more complicated than Fannie
Mae or FHA loans. Veterans
usually understand this, being
used to government
paperwork. But to succeed,
you better know how to help
veterans navigate the loan
process.
The best part about VA
loans is that they allow lenders
to consider a wider range of
borrower characteristics than
other loan programs. For
example, underwriters are able
to take into account the
borrower's residential income,
extra expenses such as
childcare, and how many
people are in the household
the borrower has to support.
Often borrowers have been
approved for VA loans when
they have been turned down
for other loan products. It
doesn't mean the Veterans
Administration approves loans
like crazy or allows bad loans
to be made, but they are
willing to work with borrowers
to make sure they are able to
use their earned benefits.
These are good loans that
serve everybody well.
What lenders can do
What's most important to know
is that VA loans are more than
just a loan program-they are
a federal benefit, created by
Congress, which enlisted men
and women have earned once
they meet certain service and
discharge requirements. The
key to successfully selling VA
loans is not to dabble in them.
The commitment begins with


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NMP - November 2019

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