VA Loan and the Advantages for Clarksville TN New Home Buyers
Clarksville is right next to Ft. Campbell, KY and this means that many of the buyers want to use their VA Entitlement on their new home purchase. This is an excellent loan source to get into a home in the Clarksville TN area with no money down.
That is one of the major benefits of using a VA loan, no down payment. Even those Veterans that have previously used their VA benefits for a home purchase may be able to do it again with the expanded use of the entitlement that is now allowed. Prior or current military service and retired Veterans usually have VA Entitlement that they can use to finance a home.
Benefits of Using VA on New Construction- The VA loan helps many buyers buy instead of rent in Clarksville. With enough entitlement the Veteran can purchase the new home without having to invest in a down payment. This could save the Veteran up to 20% of the sales price for a traditional 80% loan to value conventional loan by allowing 100% of the sale price to be financed.
Buying Versus Renting- Believe it or not it is sometimes easier to buy than rent. When renting your credit may have to be better than buying on a VA loan. The upfront money may be staggering with first and last month rents, a hefty security deposit and pet fees and deposits required. You can buy a new construction home and not have to worry if a landlord will allow your pets.
Builders Selling New Homes on VA Loans- They are very familiar with selling VA and actually encourage it. They start at the beginning by selecting plans that work and then building to codes knowing the chances that a VA buyer may come along. VA appraisers are not harder on these properties than they are on FHA loan appraisals. If it is built right, it will pass with flying colors.
The Appraisals- Safe, Sound and Secure are the standards that the appraisers look for. This is to protect the lender and to protect the Veteran. Recent comparable sales are used to evaluate and substantiate the value for the loan.
If the appraisal comes in below the sales price the following options are available:
- The appraisal can be challenged with proof of better comps or that an error was made. This may or may not change the appraised value.
- The buyer can pay the difference between the appraised value and sales price.
- The seller can reduce the price to appraised price.
- The buyer and seller can renegotiate price and terms.
- Or the sale can be canceled.
Here are the benefits of using a VA loan on new construction.
- No down payment if the Veteran has sufficient entitlement
- No mortgage insurance (MIP or PMI) is collected
- A Funding Fee may be required but Veterans collecting a VA disability do not pay this
- Qualifying is easier with higher debt ratios allowed than on conventional financing
- VA Entitlement doesn't expire
- You can use your VA loan more than once
- You may be able to have more than one VA loan at a time
- You can sell your loan on an assumption to a person that qualifies for the payment and gets approval
- If the person assuming the VA substitutes his entitlement the original borrowers entitlement is restored.
- You can rent your home as long as you bought it as your principal resident with the intent to occupy
- You can buy an investment property up to 4 units if you intend to live in one of the units. What a great way to get started as a landlord.
Buy with the Intent to Occupy- These loans are for your primary residence. If you are buying with the purpose to urn it immediately into a rental property then this is fraudulent. Lenders will require you to affirm you are buying it as a principal residence for yourself or a qualifying spouse.
Closing Costs and Prepaid Items- Builders and other sellers in Clarksville TN usually help pay most of these costs making it easy for the VA buyer to get into a home with very little investment.
Accept the Responsibility- Using your VA loan means you are taking on a debt and the responsibility to maintain the home as good collateral for the loan. Take it seriously and even if you buy with no money down and get all your closing costs paid, you still will have monthly payments due on your mortgage and maintenance from time to time. Protect your investment and credit. If you default, it will severely hurt your credit and penalize you when you try to use your VA loan again.
VA Funding Fee- Some VA buyers are exempt from paying this fee. Others must pay. If you are active duty you are probably not exempt as you are receiving military pay and not a disability. See who is exempt and learn more about the funding fee.
See if you qualify for a VA loan on your New Home. Contact The Real Debbie REynolds at 931-320-6730.
2130 Wilma Rudolph Blvd.
Clarksville, TN 37040
it would be my pleasure to assist you!
"The Real Debbie Reynolds"
931-771-9070 Office | 931-320-6730 Cell