VA loans offer eligible Veterans very competitive financing with little to no down payment. Veterans who have served a specific amount of time may earn of Certificate of Eligibility which allows them to apply for a VA mortgage loan.
In the Seattle – King County area, the VA “loan limit” is currently $500,000. I have quotes around “loan limit” because technically VA does not have loan limits – this is the limit to the amount VA will lend up to 100% loan to value ie a VA home buyer can buy a $500,000 home with zero down payment.
Today (as of 1:30 pm 11/13/13) I’m quoting 4.000% for a VA 30 year fixed loan based on a sales price of $500,000 with zero down payment (apr 4.309%).
If the Veteran buys a home beyond this amount, their down payment is 25% of the difference between the “loan limit” and the sales price. For example, a $600,000 home would have a minimum down payment of $25,000. ($600,000 less $500,000 = $100,000 x 25% = $25,000).
It pains me when I see that a seller may not be considering VA loans for financing. I think buyers wanting to use a VA loan for their home purchase should submit their offer with the VA financing anyhow. Perhaps they or their agent can help educate the listing agent or the seller. VA loans are basically the same as a conventional loan — they are no more difficult or challenging. The only additional cost to the seller is the Veteran’s half of the escrow fee. On a sales price of $500,000, we’re talking about $850 in closing cost).
If you are selling a home or are a listing agent, please do consider accepting preapproved VA buyers.