Selling VA loans starts with a vision – NMP

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Very few people and organizations achieve greatness by accident. For the most part, success starts with 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 to get there.

When it comes to VA loans, the distinction between lenders who have had success with military borrowers and those who have not is very clear. The reality is that relatively few mortgage lenders do a good job of helping veterans and the military reap their hard-earned VA loan benefits. Those who were successful with VA loans, on the other hand, did so because they started with a vision – a vision built around the fact that VA loans are different from all other loan products and require resources. and unique skills.

Any mortgage lender is able to provide the training, expertise, and resources to help mortgage professionals help those who have served use their military benefits. And there’s no better time to do it than now.

Why VA Loans Are So Important

VA loans have grown in popularity in recent years, and for good reason. These loans allow eligible veterans to finance the purchase of a home or refinance a loan, without a down payment or private mortgage insurance. Outside of the USDA Rural Loan Program, there is no better deal for veterans looking to buy a home on the market today than VA loans. The second most flexible federally insured loan product is the FHA, which still requires a 3.5% down payment. Another good reason to get started with VA loans is that the US Department of Veterans Affairs plans to increase VA loan limits starting in 2020 to $ 484,350 in most US counties.

Traditionally, VA loans have been severely underutilized, but that is starting to change. According to the Consumer Financial Protection Bureau (CFPB), the percentage of military personnel who took advantage of the VA loan program increased from 30% in 2007 to 78% in 2016. This is great news, but it is also an indicator that these loans continue not being used as much as they could be.

One of the main reasons that VA loans are withheld is the fact that there are many misconceptions and misconceptions about them. For example, many people think they are intended for first-time home buyers and can only be used once, which is not true. Eligible veterans can use their VA benefits throughout their lives. We have had borrowers who were 70 years old, lost their homes during the 2008 recession, and were able to use their VA benefit again to purchase decent housing for their remaining years without cash. Eligible spouses can also use this benefit.

One group that many mistakenly believe does not qualify for VA loans are those who serve part-time in the National Guard. Although they may not be active duty soldiers, members of the National Guard are eligible for VA loan benefits after six years of service.

Other myths about VA loans persist, such as the belief that a minimum credit score is required. There isn’t one, although most lenders have their own guidelines that vary between 580 and 640, and rates can vary depending on the borrower’s score. There is also no minimum debt to income ratio 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 compliant loans, but not by much. According to Ellie Mae’s loan statistics, 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 that VA loans are difficult to obtain and not worth the trouble. It is true that there is a lot of paperwork involved, as well as a few nuances that can be difficult. VA loans are not difficult, but they are a bit more complicated than Fannie Mae or FHA loans. Veterans generally understand this, being used to government documents. But to be successful, 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, insurers are able to take into account the borrower’s residential income, additional expenses such as childcare, and the number of people in the household the borrower must support. Often, borrowers have been approved for VA loans while they have been refused for other loan products. This does not mean that the Veterans Administration approves loans like crazy or authorizes bad loans, but it is ready to work with borrowers to ensure they are able to use the benefits. that they won. These are good loans that serve everyone well.

What lenders can do

What is most important to know is that VA loans are more than just a loan program – they are a federal benefit, created by Congress, that enlisted men and women have earned once they meet certain service and discharge conditions. The key to successfully selling VA loans is not to touch them. Engagement starts with being a VA Certified Lender, training loan officers to become experts in VA lending, and providing the resources the organization needs to be successful, so everyone is aligned.

A few years ago, we made a commitment at my company, Mortgage Network, to provide free VA loan training to all loan officers. Upon completion of training, they understand what matters to a veteran borrower and learn about military service in general, including the various branches of service and military ranks. They also inquire about special discounts on loans for disabled veterans. For example, the Veterans Administration allows waiver of loan fees for disabled veterans. There are also special exemptions for certain insurance products, which can save the borrower a lot of money.

We ask our loan officers who sign up for the training to fully commit to the VA loan program and then support them with a suite of marketing products and services to help them generate business, including sites Unique military-themed webs. The idea is that we want our loan officers to be trained in VA loans and to know exactly what they are talking about when serving military borrowers.

For example, when working with veterans, it is crucial to listen to each client and understand their entire financial situation and life goals. This not only makes good business sense, but it helps uncover the details and strengths of each veteran candidate that can help during the underwriting process. Loan officers who sell VA loan products should also be able to educate real estate agents about them, so that they can defend your client’s name when submitting offers to buy a home.

It’s a very personal mission for us, but it’s also a smart company. Lenders and mortgage professionals who want to add VA loans to their business have to live it and breathe it. In our case, we regularly hold seminars and volunteer to support the military community. While some housing markets are clearly home to more veterans than others, there are many opportunities to give back in virtually any community.

The bottom line is that VA loans are good deals, but successfully integrating these loans into your business, whether you are a lender or a mortgage professional, takes vision, time, training, and resources. . On the other hand, helping those who have sacrificed their livelihood in the service of our country can be the most rewarding job you have ever done. In our opinion, the effort is worth it.


Brian Koss is Executive Vice President of Mortgage network, one of the largest mortgage lenders in the eastern United States. Since 2000, the company has sold over $ 35 billion in mortgages while building a reputation for nationally recognized customer service. He can be contacted by e-mail at [email protected].

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