VA Home Mortgage Loan Scams: Don't Let Your Benefit Turn into a Burden
As a United States Veteran, you deserve every benefit you get. You've served your country well, and you deserve something in return. A VA home mortgage loan is one benefit available to veterans, and it's a good one. You can buy a house with little to no down payment, your loan will be guaranteed by the Department of Veterans Affairs, and you probably won't have to pay PMI, even if you don't put down 20 percent of the purchase price of your new house. You've earned it. But the world isn't a perfect place, and we live in an age where people will try to exploit anyone they can. Sad, isn't it? If you're considering a VA home mortgage loan, keep your eyes open.
These tips can help you avoid a VA Loan Scam.
"Don't call me, I'll call you."
You should be the one to initiate the process. Get lender recommendations from colleagues, friends, your bank or credit union, and online research. Anyone who calls you has likely paid for information regarding your loan, your finances, and your credit. They may use language indicating they're authorized by the Veterans Administration. The VA does NOT give out your information for solicitations, so hang up and do your own research.
Don't pay any fees upfront.
You'll pay closing fees at your loan closing, but no lender should ask you to pay anything to apply for the loan.
Read the fine print.
Don't sign anything without reading--and fully understanding--the document. You might be agreeing to terms that weren't what you were promised. And that could spell a higher interest rate, a different term, or an unexpected penalty. Don't be afraid to consult with your closing attorney if you have questions.
Look for a nearby lender.
Any lender that offers you a mortgage has to be licensed in the state where you live. Knowing they're headquartered there will give you some peace of mind, because if you do have problems, chances are better that you can reach a real person, instead of going through a call center.
Know what you want, and don't let anyone talk you into another option or service without doing a lot of research.
If you want a 15 year mortgage because you need to build equity in your home before retirement, don't let a lender tempt you into a 30 year mortgage to get a lower monthly payment. (You'll probably be paying a higher rate of interest on a 30 year loan, so the loan will cost more over time. Run the numbers on our 15 vs. 30 year mortgage calculator to see the difference.) Discuss your needs and longterm financial plan with someone you trust before you get a loan.
Ready to learn more? One of the best places to start with a VA loan is your Regional Loan Center. For contact information, take a look at the VA list of Regional Loan Centers on their website. Doing your research and getting the VA loan that's right for you is the best way to go from the barracks to the cul-de-sac, and be happy with your decision.
Still have questions? Get the facts about VA loans.