Thread: Buying a house - VA LOAN!!!!

A while back I posted about a house that my girl and I were going to put an offer on.

Well, the asking price was 185,000.
We offered 176,000 - seller to pay closing costs
They countered with 182,000 - seller to pay closing costs
we countered with 176,000 - seller to pay closing costs (same offer we made before)
They accepted.
The appraisal came back at 168,000

Here's where it gets tricky. My girl used to work in the mortgage industry. A good friend of hers still does and is a veteran like me. She said that if the buyers are to pay the closing costs and they are charged an origination fee, then there are no closing costs. Does anybody have any experience with VA loans?

If in fact the lender can't charge me closing costs when we pay an origination fee, we are thinking of offering 164,000 to get a little bit of equity. I don't feel right offering 168,000 and getting zero equity but I just don't know how well the sellers will like it.

My girl and I have a goal to not lose much money up front, we don't want to dry up our savings......

Also, I think my lender is dissatisfied with the appraisal, he said the VA usually comes out low on the appraisals so he's battling with them. The VA also estimated a smaller sq footage on the house by like 200 sqft. He also said that the VA compared the house to other homes further away in less liked neighborhoods.

The VA will push for the lowest appraisal since they are on the line if you default. The realtor(s) and lender will push for the highest appraisal because they want to get the deal done, and get paid on commission. You and your girl need to decide what you are willing to pay for the house, and if you can't get that deal done, regardless of what the lender and VA say, then walk away. We are still in a buyers market, so you are in charge. I think you still have my number, so call me if you need any (bad) advice.

We bought our house in april with a VA loan in North Fort Worth. Everything went smooth for us. Seller paid everything and even paid off one of our lines of credit in the process. Even in this market since we signed the sales contract the price of our model home (new subdivision) has gone up 10k....free equity for us.

I just bought my house with VA ...

I had some problems though.

The Appraiser ....

If the home is appraised at 168, that is the loan amount for the house only.. there are additional va funding fees you have to pay. The closing costs do not come into play with the VA loan as they are calculated after the apprasial price.

Our house was appraised at 150, we purchased for 150 (new construct) Our closing costs were around 4k and the VA funding fee was around 4k at the 5% interest rate.

So all in all our mortgage is for 154.5k where as the value of the home is 150k. The closing costs were payed for by the builder.

Biggest problem with VA.... Bad appraisals... IMO

I am so jealous of your non-California housing prices. :3

I went with an FHA loan for my house (New construction), 3% down seller payed closing costs except for a few small things ($100 or so) that they couldn't for whatever reason. I wound up paying something near $12,000 before I could get my hands on those keys.

Originally Posted by QuickLightning

I am so jealous of your non-California housing prices. :3

I went with an FHA loan for my house (New construction), 3% down seller payed closing costs except for a few small things ($100 or so) that they couldn't for whatever reason. I wound up paying something near $12,000 before I could get my hands on those keys.

Well a VA loan is easy enough to get... :4

It's going to be difficult (If possible at all) to get a loan where the value of the home is $8K less then the loan amount. Simply put, it makes no sense for the lender to do the loan. If you default, there is no way they will get all of their money back since your moving in upside down on the loan. To my knowledge, there isn't a lender out there right now that will do over 100% LTV (Loan to Value) and frankly, you're lucky if you find one that will/can do 100% LTV on a VA regardless of what the VA program says.


To realistically get the loan closed, you need to get the loan under the estimated value which is an issue if the seller is upside down in their loan.

And the problem with the appraisal is that the VA will lock that apparaiser/appraisal to your case number so you MUST use it regardless of it being a good or bad one. Even if you get an adjustment to the appraisal, there is no telling if an Underwriter will cut the value which puts you into the same spot again.