VA Loan Myths Busted

I don’t know about you, but I rarely have time to watch TV.  When I do have a spare moment to collapse on the couch and entertain myself, one of the shows I like to watch is Myth Busters.  I have only seen a few people that enjoy their jobs as much as these guys PLUS they get to educate people while making science fun.  I call that a win-win.

The way the world works, I started thinking about Myth Busters and that lead to Ghostbusters…”who you gonna call?” reverberating in my head. This lead to what myths abound in the mortgage industry that need busting?  There are many myths that I run into each time I have the privilege of speaking to someone looking to buy a home.

So grab your ectoplasma gun.  Put on your safety goggles.  It’s time to put some mortgage myths to the test!

 Mortgage Myth Busters

I can only get a VA loan if I am in the military.


False.  While in general you either have to be active duty or be a veteran, there are circumstances that will allow a non-veteran to obtain a VA loan.  If you are the spouse of a veteran who dies in the line of duty, it is possible to obtain a VA loan on your own. Note that you cannot be remarried to use this provision.

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I’m a veteran I am entitled to a VA loan.  You don’t have to pull my credit or get any documentation on my income or assets.


False. While obtaining a VA loan is a benefit of your service, it is not unconditional.  The Veteran’s Administration still has guidelines for qualifying before they will agree to insure your loan and allow your lender to make the loan to you.  Everyone applying for a VA loan must meet minimum credit standards, must have income to support the payments and have money left over to eat, and prove they have sufficient assets to close the loan.   The benefit of a VA loan is the ability to obtain the loan, with up to 100% financing and no mortgage insurance, not the guarantee of getting a loan.

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You can only have one VA loan at a time.


False. You can have more than one VA loan at a time provided you have sufficient entitlement to guarantee the loan. The Veteran’s Administration allows every Veteran a certain amount of money they can borrow.  The basic entitlement of $36,00 allows a veteran to borrower up to $144,000 with no down payment. Bonus entitlement can also be used and will allow for larger loan amounts.


A VA loan is 100% financing; I don’t need a down payment.


False. If you exceed your entitlement amount, you are responsible for making a 25% down payment on the remaining amount.  If your loan amount exceeds your entitlement by $10,000 you will need to make a $2,500 down payment.

VA Loans Fact or Fiction

I can get a VA home loan even if I am deployed or stationed in a different state.


True. You can purchase a home for your immediate family to occupy as their primary residence.  You can also refinance a loan you have on a property where you don’t live from one VA loan to another.


The seller can pay off my credit card bills.


True. While this might be tricky to negotiate, the seller is allowed to make up to 4% in seller concessions in addition to the 6% they can pay towards closing costs and prepaid items. This means the seller can pay off your credit card bills, buy you some lawn furniture, or give you money to redecorate the house.  All items must be detailed in the contract and all money that exchanges hands must be documented on the closing disclosure.

Are you using a VA loan to buy your home

It’s a VA loan, I can refinance without an appraisal.


True. If you are doing a VA Interest Rate Reduction Loan (VAIRRL ~ pronounced Earl) an appraisal is not required.  This is not true if you are purchasing or doing a cash out refinance or did not have a VA loan and are refinancing into a VA loan.


I can use my VA loan to buy my kid a house.


False. You cannot use a VA loan to buy an investment property or a second home.


As you can see, there are many myths out there.  But, there are also many features and benefits available to you when considering your mortgage options.  The best choice is the loan that is right for you.  Be sure to speak to a mortgage lending professional to unearth all of the options available to you.

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24 thoughts on “VA Loan Myths Busted”

  1. Great myth busted about VA loans. I work with several clients that have VA loans and it seems to work for them. And, I agree that veterans should be able to get special loans for their service to this country. Thanks for sharing the myths.

  2. Fabulous idea to dispel myths in your industry. My hubby is a Vet & never thought to apply to the VA for a home loan . I also would have thought you could get one for a vacation home. Shucks.
    I need to start thinking if there are myths in my industry. Bet there are. Do you have any off hand for me?

  3. I love your myth busting idea, Christy. I think a lot of people get confused about all loans related to mortgages and it’s great to set the record straight.

  4. I didn’t know many of these…but then again, I am a homeowner and it’s not my job to know… I rely on my personal mortgage person, like you, to tell me my options… which is better than going to a bank, ANY DAY! Thanks for all you do for homeowners… great post, very informative.

    1. Thanks Kristen for the kind words. I agree that a mortgage professional is your best friend when purchasing a home. A knowledgeable lender will help make sure that your biggest purchase doesn’t turn into your worst nightmare.

  5. This is a great post that helps really clear up any “myths” about loans for VA’s. It always interests me how these ‘myths’ get started and how somehow they become part of the consciousness whether true or not. This is an area you seem to be very knowledgeable and passionate about Christy. It’s always wonderful when your expertise can be of service to others too.

  6. While I’m not connected to the military in any way Christy, it’s nice to know I can share this information if it should every come up. We need more myth busting when it comes to consumer activities. So many people just don’t know. Thanks for sharing your expertise.

  7. Christy – It’s good that you put this out there. I was in the Air Force Reserves for over 10 years before I knew that I was eligible for a VA loan. I was just talking with another enlisted person one day, and he mentioned it to me. I was able to get a house loan – and it made such a difference in our lives! So, keep spreading the word – because the military itself doesn’t always do a stellar job of telling people!

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