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A Quick Guide to VA Loans
FINDING A SUITABLE AND AFFORDABLE HOME
The Neighborhood
If you want to be entirely satisfied with your new home, be sure that you can answer yes to
the following questions:
- Is the house suitably located for schools, churches, shopping facilities, transportation and your place of work?
- Is the neighborhood well maintained and are the other houses similar in type and price range to the one you wish to buy?
- Does the area have local zoning laws or deed restrictions which will protect the neighborhood? Zoning laws and deed restrictions protect against such things as the construction of commercial property in residential areas, and may regulate lot sizes, the types of houses that can be built in the area, and whether or not manufactured homes may be placed on privately owned land.
- Is the house located so that you won't be bothered by noise, dirt, and danger from highways and other streets with heavy traffic?
- If not already installed, will there be adequate streets, sidewalks, curbs, and gutters? These items are called "offsite improvements," and you should be sure which of these improvements are included in the sales price of the house and that they will be provided without additional cost to you.
Remember that if "offsite improvements," such as sidewalks, street curbs and pavements,
storm sewers and sanitary sewers are not included in the purchase price, their cost may be
assessed against you if they are installed by the city or county, and you will have to pay for
them later. It is a good idea to have the builder or seller list on the purchase agreement the
"offsite improvements" which are included in the sales price.
The Lot
In addition to the general location and neighborhood, you should make sure you are going to be
satisfied with the size and shape of your lot, and with the existing or proposed lawn, shrubbery,
walks, driveway, garage. etc. If any additional work on the lot is to be done, make sure that the
purchase agreement lists all such improvements which the builder or seller will make as part of
the purchase price. If you want to have play space for the children, or a garden, make sure that
sufficient space is available.
Will the land be properly graded to provide diversion of water away from the building
and from the lot, to prevent standing water and soil saturation harmful to the structure
and to lot use, and also provide appropriate finished grades for safe and convenient access
to and use of the lot area? If it is an existing house, take careful notice of the slope of
the ground around the house. It should slope away from the house so that water will be carried
away from the foundation; otherwise, the water may cause trouble. If possible, check the lot
after a heavy rain to see whether it drains properly.
If you are building a house or placing a manufactured home on land you are purchasing
separately or already own, consider how far away the utilities are and the cost of
hookup. If service from a public or community water or sewage system is not available,
find out if the ground water and subsoil conditions are satisfactory for an individual
well and/or sewage disposal system.
The House Itself
If you buy a house with a VA loan, VA will appraise the property to establish its reasonable
value, which is an estimate of the current market value. You will be notified of the reasonable
value. If you are building a home or buying a newly completed home with VA financing, VA or HUD/FHA
will usually inspect the property during construction. These inspections are to see that the house
is constructed according to the plans and specifications originally filed with VA and that it meets
the minimum property requirements established by the Government.
This inspection service is valuable to you because it helps assure that your builder follows the
construction practices advocated by the Government to assure a sound structure. It does not give
you architectural supervision and does not assure you that you will be completely satisfied with
what you get. Your main reliance must be on the reputation and integrity of the builder from whom
you choose to buy.
But remember that the Government cannot guarantee you that the house is properly constructed
in all respects, nor can it guarantee that you will be satisfied with the house in every way.
The responsibility of the Government is limited under the law. VA is guaranteeing your loan,
but it cannot under the law guarantee your house.
Because of this, it is very important that you have confidence in the ability and honesty of
the company or person who is building or has built the house. If you have any doubts at all,
be sure to get the advice of people you can trust who know the homebuilding business. A
few words of good advice from a responsible person can save you years of future trouble.
If you plan to have a new house built according to your plans it would in all likelihood pay you
to employ the services of an architect.
If you are buying an "old" house (that is, a house that has been previously occupied), there
will, of course, be no VA or FHA inspection during construction. It is extremely important
for you to make sure that the house is structurally sound. Here, too, the advice of someone
who understands housing construction can be helpful.
As you look over the house, your primary job is to make sure that the house meets the needs
of your family. The checklist should help you in checking over the main features of the
house. The following pointers are given to help you to know what to look for.
FREQUENTLY ASKED QUESTION # 21 [ -more VA Loan questions- ]
- - - - - -
Q: The VA Loan for Home Equity Refinancing - Can I refinance with the VA?
A: " If you own a home and are considering refinancing, VA refinancing may be just what you need. Under the terms of VA refinancing, your current real estate debt is paid out of the proceeds of a new VA mortgage. The requirements? The same borrower must use the same property as before. This type of refinancing is also known as a 'Cash Out"" refinance, and is only good for homes that are used as the owner's residence.
Refinancing is available for up to 90% of the appraised value plus all closing costs in many cases. Your home must have enough equity to cover the loan. These terms may not be available in all states, depending on local lending laws. Check with your local VA rep to learn more."
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