MLO | Mortgage, Home Buying & Selling Insights

VA Loans | What you need to know! What are the Myths of the VA Loan?

April 14, 2020 Addy Nett Season 1 Episode 7
MLO | Mortgage, Home Buying & Selling Insights
VA Loans | What you need to know! What are the Myths of the VA Loan?
MLO | Mortgage, Home Buying & Selling Insights
VA Loans | What you need to know! What are the Myths of the VA Loan?
Apr 14, 2020 Season 1 Episode 7
Addy Nett

Today Casey & Addy discuss the details of VA Loans. Is the industry supporting this Program? What are do we need to know and what is are the common misperceptions of the VA Loan Program?

Show Notes Transcript

Today Casey & Addy discuss the details of VA Loans. Is the industry supporting this Program? What are do we need to know and what is are the common misperceptions of the VA Loan Program?

Addy Nett:   0:01
the V A loan. A very, very, very important product. That trends continues to get into a home. For zero down today we're introducing one of the newest team members to the M L O mortgage advisory staff. Casey Carpenter. Casey took a time out of his day to chat a little bit about the V alone. Why are sellers not even accepting these financing terms? And what can we do to combat the myth via is not a competitive home. My name is Addy Nett. This is MLO Enjoy the show. Today we have a very, very, very special announcement. So we were able to bring on the newest, the newest member of the modern loan officer team. Casey Carpenter. Welcome, Casey. How you doing, man?

Casey Carpenter:   1:04
Good man. Good. Addy. I appreciate it very much. Thanks for, uh, thanks for bringing me on the show.

Addy Nett:   1:09
Oh, yeah.

Casey Carpenter:   1:10
Foremost and, uh, super super excited and just super happy and privileged to be joining this. Ah, special movement we got going on.

Addy Nett:   1:18
Oh, yeah, for sure. On Casey, today's a special day, Isn't

Casey Carpenter:   1:22
it a very

Addy Nett:   1:24
special way. Got a birthday? It's Casey's birthday. So everybody out there younger

Casey Carpenter:   1:29
now it is.

Addy Nett:   1:29
Yeah, everybody out there. He's watching and knows. Casey, do a little shout out for him. Ah, comment. Whatever it's, it's a big birthday. So we take that serious around here. Um, one of the things that the biggest topic for today as Casey is not only one of the leading mortgage advisers in the area. He's also a veteran. So a thank you for your service, Casey. Anytime. Yeah. And I wanted to dive into the V A loan because there's a lot to talk about here, and I think a There's a lot of misperceptions. So in this episode, we're going to break down some of those misperceptions and maybe give some past examples. Not only that, I've experienced helping veterans take advantage of the V A loan program, but also Casey being a veteran and helping people at the same time. So, Casey, would you mind just like right off the bat? What are some of the major kind of faux pause and misperceptions of the V A loan program?

Casey Carpenter:   2:34
Yeah, well, kind of first and foremost during these times, obviously, that we have going on in the in the world's shout out to all the service members, first responders, healthcare workers, all those people that are in the front lines, you know, dealing with this crisis we have going on. So, uh, service members all around, you know, definitely they come in hand and crucial times, but, um, kind of coming back. Ah, you know, for me, um, the biggest saying that I connect with, you know, for the V a stuff. And I think that that goes out there for misconceptions is one of this is hard, hard to do the 11. I mean, you'll just hear that.

Addy Nett:   3:14
So when they're saying it's hard, Casey like, let's break that down for not only the buyers, the sellers, the agents, man. But you know, what is what is difficulty like? Is it difficult for the client? Is the difficult for the agents is a depict difficult for the I

Casey Carpenter:   3:30
really think that's just more of a misconception or a just misinformed mint. Um, from from transactions, you know, there's a lot of hands involved in any loan process, right? You have the appraiser's. You have real estate agents, mortgage advisers, underwriters and that kind of stuff. So I think that's really where it comes involved on with that misconception of it being hard and really with the V A loan. Um, people have to remember like, this is amazing on a great opportunity for war veteran to buy a house with zero down the government backed loans. Um, and kind of Yeah, be What I've heard or seen out there is the one conception is ah, misconception is appraisers take take long longer on a V a law than a regular loan. That's something you know, you you've heard out there

Addy Nett:   4:17
That's a really good point. And I think it's important for everybody to know because especially our team, we we focus on trying to have everything in the house. So when it comes to the processing, the support team underwriting as close as we can keep all of that within the company and not outsourced, we can push along a file a swiftly as possible. However, with that V, the V A program, the appraisal process is actually 100% managed by the V A department. Correct? Correct? Yeah, And I think there was some huge changes a couple years ago when Thea appraisal turn times were slowing down on the via side, and they completely took recognition of the issue in and changed it. I mean, I've been seeing some pretty swift turn times over the last couple of years and some pretty, ah, accurate closings around the 30 day standard mark, which you would see and say a conventional loan or an F h a lone. Have you experienced that, too, In your business, in your client's

Casey Carpenter:   5:25
absolutely and highly agreed Thio. And I think that whole misconception of kind of fall back on that is we were at a time that would think it was around 2016. You know, we're in a time route. Appraisers were just short handed all the way around. You know, of course, you had longer turned times on stuff because actually, there was more transactions going than there were appraisers that could actually get to the transaction. So, um, you really saw that in a lot of it. So it was Ah, um, kind of a tie in there to that to that v A. But it really was an industrywide thing. And I think you know, a little bit of that just carried on through the years. But what I see on turnaround times. Justus fast as any other alone that I'm doing out there. And it's still once again, I think, one of, if not the best loan that you can do for, you know, buying a home.

Addy Nett:   6:12
I can play agree, and some of the people that I have been able to work within the the M. L O team here, just a fantastic group of people to work with as well. And it's really an opportunity for us to give back as well and be advocates for veterans out there shopping for homes, and not only when they've made the jump of like, hey, I'm gonna utilize this benefit that I have but also when they are looking at homes because Casey one example I had last year with a fantastic veteran family is they wanted a particular home right, and the sellers didn't even select Veet as an eligible or acceptable term of financing. These air the sellers. So when you go on on whatever search, say right, and when I'm talking to everybody out there, um and you're using whatever it's like Zillow, Redfin Ah, whatever search site and you look on their acceptable terms that will stay like cash conventional F H A and then VA. They're accepting all types, right? This particular house didn't even have via as an acceptable form for offers. So most people look on it. That home won't even come up on their home search if they've done a detailed profile, fill out with an agent or independently. So one thing that we do is a team is we will proactively call the listing agent, leverage our local reputation and explain just educate, taken educational footing. And tell them, Hey, you know, this is what the programs like talk a little bit about the appraisal thing and that particular example. Casey. We were able to get the veterans offer accepted, and we close on the loan. So I'm glad to have you on the radio and tell me a little bit more about that. Like literally, Do you think it's just the appraisal Lake? I think this is a way for people to give back, you know?

Casey Carpenter:   8:10
Yeah, I think it's amazing opportunity. Personally, what I love about it is I mean, being a veteran myself, um, really had a kind of learn a lot of the benefits and programs and stuff that we're out there, not just your V a home loan. I mean, you have education benefits for for college or trade schools. You have, um, different discounts you could be awarded to. There's different, Ah, insurances or insurance companies, you know, that give pretty good, pretty good products and stuff for veterans. But what I learned is when I'm talking with the veteran through, I'm just a home loan process because I've walked myself kind of from once. I got out of the United States Navy. That's the service there is around. Um, once I got out of the Navy, I started learning all these other benefits for myself. Medical school. And so now when I'm talking to a veteran themselves and we're going through just the home loan benefits, I kind of threw conversation will hear these things come up. Hey, because one question, we all know what the V alone is. Ah, do you have any service connected disability or service connected disability rating? Because that can affect you know they have front funding fee and stuff like that. But having that also ties into other benefits, there's several other education benefits that you could be awarded are available to if you have a rating. So all kind of tap into some of those questions as well as we're going through the home buying experience. Just cause there's so much out there, honestly, that a veteran doesn't necessarily know, not just the home loan. There's ways to, I mean personally myself. I put myself through three degrees with V A benefits. I have two associates, Anna, bachelors and finance, and it was all on V A benefits and and different programs. Wow, that's incredible. And there's a lot of little stuff, too. I mean, you could get no tags on your cars and stuff like that for certain, and I just I So I truly enjoy, You know, even if a home loan transaction for that person maybe doesn't come out of it or it's not the right timing, I guarantee that there's some kind of benefit they're going. They're going to get out of it from just a conversation with me that they'll be able to use. That will help them a lot.

Addy Nett:   10:29
Yeah, for sure, and I think to dive a little bit into some insight on the qualification side, it's super important to be connecting with your one officer if you are a veteran. A. Just take that. Take that little leap of faith in Take a 30 minute conversation, whether it's through zoom or the phone, connect with Casey or another one officer, um, in really dive into some qualifiers because there are some unique treats to the V, A loan where some of that income might be qualifying. And some of it cannot, for example, your disability income versus your student living income. Right, Casey?

Casey Carpenter:   11:09
Correct. Correct. Yeah, I like that. What? I'm sure it's still called this now. But your basic housing allowance be age stuff like that. You have to You want to just look at all those little I know in the service when when we're active duty. I mean, there's a lot of those stipends. Get food stipend. There's a lot of little stuff, so it's all just not included. That's definitely something. That's a great question you want to dive into with your with your mortgage advisor Loan officer exactly what it is. What income can I use? Base pay? Is there any extra pay? You know, because definitely we see on those pay stubs where l E S is, I think they still got homeless, as it's very detailed on the breakdown for euros. So those income. So it's definitely a great question. Yeah, incomes that could qualify, and it comes that can't be used for qualified.

Addy Nett:   11:53
Yep. And you know, you do need to go through the process of getting pre approved and breaking down the numbers of what you actually can get approved for, because there are still that two income ratio requirements, household obligation requirements. The V A wants to protect the veteran and get them into, ah, home, but also a financial situation that's not going to be overbearing to their personal finances. So that's one thing that I really, really, really love about the V A loan is. It takes into account the household obligation. Casey, would you mind just diving into that a little bit deeper for us? Well, one

Casey Carpenter:   12:37
with it. I mean, the V is a government back alone, right? And for that I mean, even Mia's a veteran. Personally, it's nice known that you have some type of security there with the government back alone, as far as, um, those upfront kind of funding trees that they're putting in place. And Addison, you can kind of help me or correct me if I'm wrong. But when you're when you have those kind of put in place, they're really helping you insure you there. You know, if anything were to happen, you know, default stuff like that. You know that's the place to cover that lender to help them out, but also not bury you with a burden of of, you know, half to come up to pay off. You know, pay off that debt and stuff like that. There's obviously steps then you would take place. I'm if you can't, but there's a little bit more guarantees backed into those VEET loans being government back then. It is just a regular conventional now, yes. Oh, especially safeguarding, you know, or at least trying to help protect a safeguard that veteran

Addy Nett:   13:38
Well, And I think I wanted to dive a little bit deeper, more into the household obligation, because that's that's something that

Casey Carpenter:   13:46
on the qualifying

Addy Nett:   13:47
yes. Oh yeah, yeah, the Via. Won't they take into consideration how many family members are with the veteran actually living under the household? And I think that's fantastic because they want to make sure. Okay, I've got X amount of people in the home they want to make sure If you're you're the breadwinner, essentially, everyone's gonna eat and the bills are going to be paid. And that's something that most people might be like. Oh, that's annoying, right? Oh, that might affect my approval. However, I love that. I love that, Um, the V A program is taking into account the reality and not wanting to overextend veterans.

Casey Carpenter:   14:25
Absolutely. You know, I I personally like the fact that they look at the, uh, you know, the residual income side of it, right? I mean, is there enough even, you know, even if you're qualifying maybe kind of a front, we have this back in peace that we look at his loan officers, mortgage advisers, residual income. Right. And I do I do like the fact you have debt to income ratio is put in place. You like. I like that you have rules and regulations that we have to follow because at the end of the day, it is setting us up for success. Is trying to help you not overextend yourself. And so, as a veteran, Yeah, sometimes it can be fresh. I think it could be always frustrated as a consumer being told, you know? Okay, we can't maybe not necessarily purchased the stuff they were Americans. Or at least we're consumers. And we want to buy all the time, right? We want to buy, um, thes rules and stuff were put in place to help us by and purchase smartly. So we're not overextended. So yeah, our mortgage that we're paying and are car payments or student loans aren't essentially give or take, you know, 40 ish, 5% of our gross monthly income. So that that's, I think, what's smart and in place because it helps you by Wednesday. Stay reasonably smart with your with your buying power in your monthly obligations.

Addy Nett:   15:49
Be up so kind of bringing it back together. Casey, like we opened up with a There's huge misperceptions of the V A loan. So I've just strongly encouraged all mortgage advisers real estate agents to reconsider, um, reaching out in learning more about this program and being an advocate for our service members and people literally, who were and are on the front line, not just in the pandemic, but historically speaking for the United States. So there is the misperception that something as as professionals within our market, we can be advocates for moving down to some of the basics for consumers. I want to reiterate. First of all, an amazing amazing opportunity on the Via won't. In most cases, if you are eligible, you can execute a zero down home purchase. And within that home purchase, you are not required to carry carry monthly mortgage insurance guys. So you're going to see much lower monthly payments and obviously significantly last cash to close than you would with a conventional or an F h ey won't. So the terms are extremely favourable for the veteran. Anything to add on that? Casey?

Casey Carpenter:   17:07
Yeah, I think the number one thing isn't especially when you're talking to a real stated she was a buyer, has talked to you, or at least try to get a referral. Sometimes just a loan officer that really, really knows of the alone, you know, because anyone can probably you have access to a veil v a loan. But there's a difference between knowing the V. A loan is a loan officer or mortgage advisor and not and it should be in a product that you're unfamiliar with. Um so highly, highly recommend someone like myself or Addison on the Just Knows via loans. Because you could you could take it a step further for the client and really make it is your transaction.

Addy Nett:   17:44
Well, then, just add to everyone else, too. It is. It's extremely important to get with your won't officer and do out of the up front work because there is documentation that you can gather and be ahead of it. You can go through the pre approval process. There's a lot of boxes to check on the back end, and teams can help the veteran gather those documents advise on like, Hey, you might be missing You know this piece or that piece and give you a real clear picture in an action plan. And I think Casey, like one thing to know, for everyone is, a lot of us are home right now, Um, whether it's this you electing to be, stay at home or ordered thio or quarantine. So we have a lot of time, so taking advantage of time at home and maybe like what's 30 to 60 minutes to reach out to go through the process, actually, you know, put together Ah, hypothetical. We we refer to it as a TBD to be determined and work on gathering all those documents and have a file ready. Maybe

Casey Carpenter:   18:47
you're not even

Addy Nett:   18:47
geared up to really move for another 6 to 12 months. But it's never too late to at least get the boring stuff off of the table. Right, Casey?

Casey Carpenter:   18:56
Well, that and two, Why not be? Wanna be educated yourself on exactly where you could be at if you if you were gonna buy? I mean, we're all sitting around, or at least here at the house. Um, So do something proactive and start putting those kind of things in place and make a vision board that house on their You know, Uh, probably over half listen to the conversation. Might be renting right now. Maybe say OK, Well, here's my monthly rent. Let's find out what a monthly mortgage payment would look like. Let's let's take us a long look. An educated decision and see if if purchasing might be something as we come out of this come out of this or a might even make sense. Why were, you know, just you never know. So

Addy Nett:   19:41
yeah, and I have seen, like, whether your opinion is like, Oh, well, I don't think that I'm going to be competitive in this market here in the next quarter to because of my womb product. Please do not let that stop you from partnering with professionals within the industry who are advocates for the loan program. Because the true good ones will fight. They will call the sellers. They will explain the the product and be your sponsor essentially in your sounding board. So I just really encourage once again, don't be afraid. I and I have seen through my business over the last few years. Many sellers switch the script and accept offers with the program. Now it's not bulletproof, but it's worth trying. And, you know, I think we're gonna come out of this pandemic with a lot of people who might be looking at different offers from a more heart filled position. Like I want to help a family. Absolutely. I don't want to support an all cash offer. I want to support a family.

Casey Carpenter:   20:42
Yep. Yep. And remember that cellar. It's a human. It's a person just like us, right? I mean, we have feelings, you know? So,

Addy Nett:   20:49
yeah, I love it. Well in Casey. Hey, I really appreciate you taking the time here, and welcome to the team for M l o. Happy birthday to you, my man. Thank you. Appreciate it, brother. Very much. All right, Morse. Good stuff to come, guys. And if anyone can ever needs help, wants to reach out. We got your back here at M l O. And if you're at any state nationally, I'm getting a water reach outs. We have a full team in just about all 50 states, so don't don't hesitate to reach out wherever you are. We got your back here and thanks so much, Everyone. And thanks again, Casey.

Casey Carpenter:   21:28
Thanks, Daddy.