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From an underwriting perspective, the cash-out option is similar to a purchase loan because homeowners need to meet credit score, income and appraisal guidelines. The other option is
called an Interest Rate Reduction Refinance Loan (IRRRL), also known as the VA Streamline, which can be used to get a lower interest rate on an existing home loan and comes with a 0.5
percent funding fee. 7. VA LOANS ARE NOT MORE EXPENSIVE, NOR DO THEY COME WITH HIGHER INTEREST RATES. In reality, VA loans have had the lowest average interest rate on the market in
recent years. They also have the lowest average cost and fees when compared with conventional, FHA and USDA loans. 8. VA LOANS DO NOT TAKE SIGNIFICANTLY LONGER TO CLOSE THAN OTHER HOME
LOANS. On average, these loans do take a little bit longer to close than conventional loans. But it is a difference of days, not weeks. Over the last seven years, the average VA closing
time was 48 days, compared with 45 days on a conventional loan. The closing time also varies depending on the lender and the specific home-buying situation. 9. HOMES DO NOT NEED TO BE
IN PERFECT CONDITION. You can buy a fixer-upper with a VA loan. “It’s always going to be a case-by-case basis, but there isn’t express prohibition against it,” Birk said. “Both VA
and FHA loans have an appraisal process that looks different than conventional loans.” The first piece involves evaluating whether the home is being sold at a fair market value and that
the property is safe, sound and sanitary. While it’s always a smart idea to invest in a proper home inspection, appraisers licensed by the VA are not home inspectors. They typically look
for elements that are tied to local building codes, such as lead in flaking paint on older homes or missing handrails from stairs. They don’t look behind walls or inspect air conditioners up
close. “There can be some things that an appraiser notes during their time at the property as an issue that needs to get repaired before the loan can close. But that doesn’t
automatically mean the deal is dead,” Birk said. It also doesn’t mean that the seller automatically has to pay to make those repairs. Instead, it becomes a process of negotiation between
buyer and seller over what gets done and who pays for it. 10. HOME ADAPTABILITY GRANTS ARE AVAILABLE FOR SERVICE MEMBERS WITH SERVICE-CONNECTED DISABILITIES. There are several grants
under the home loan benefit for veterans and service members with certain service-connected disabilities that allow them to buy or change a home to age in place. These include such
modifications as installing ramps or widening doorways. The grant a veteran is eligible for is based on his or her disability rating. For example, veterans with a high disability rating may
be eligible for a Specially Adapted Housing (SAH) Grant, which can provide up to $101,754 to buy, build or change your home.