VA Loan – WeVett

VA Loan Masterclass

matt — Tue, 02 Sep 2025 21:47:38 +0000

Top 3 VA Loan Benefits in 2025

matt — Fri, 29 Aug 2025 17:25:07 +0000

What Are the Three Best Features of the VA Loan?

One of them is really like two in one. Then we’ll talk about number two. And the last one is the one that can save you money and really help you pay your home off early, if you choose to.

1. No Private Mortgage Insurance (PMI) — Even With 0% Down

The first big feature of the VA loan is that there’s no private mortgage insurance (PMI), even if you put less than 20% down. In fact, you can go all the way down to 0% down, and there’s still no PMI.

Why is that? The full name of the VA loan is the VA Home Loan Guarantee. That word guarantee is key. The VA doesn’t actually lend you the money—it guarantees a portion of the loan to the lender.

For example, if we originate your mortgage, we’re funding it, but the VA guarantees up to about 25% of any potential loss if you default. That built-in guarantee acts like an insurance policy. Because of that, lenders don’t require PMI on VA loans.

So, whether you’re putting 0% down or 10% down, you don’t have the added cost of PMI. That can be a huge monthly savings compared to conventional loans.

2. More Competitive Interest Rates

The second major benefit is that VA loans often come with more competitive interest rates compared to conventional loans.

A common concern I hear is: “If I use a VA loan, isn’t my interest rate going to be higher?” The answer: No, it shouldn’t be.

Here’s why: Investors actually pay more for VA loans on the secondary market. That means lenders make more money selling a VA loan than a conventional loan at the same rate. Because of that, VA loans should be priced better.

Unfortunately, some lenders don’t pass that savings on—they keep the extra margin. But lenders like us who streamline VA loans are able to pass that through, which results in lower interest rates for veterans and service members.

The difference can be big. Sometimes it’s just a quarter of a percent, but I’ve seen spreads as wide as 1–1.5%, and in rare cases even 2%. For example, instead of a 7% conventional rate, you might get 5.5% on a VA loan. That’s a major long-term savings.

So, if you’re not being offered a better VA rate, make sure you’re working with a lender who truly understands VA lending.

3. Streamlined Refinance – VA IRRRL

The third major feature is the streamlined refinance, officially called the Interest Rate Reduction Refinance Loan (IRRRL)—often nicknamed the “VA IRRRL”

This is one of the most powerful long-term tools of the VA loan. With an IRRRL, you can refinance to a lower rate with:

No appraisal
No income documentation
Usually just a soft credit check

As long as you can drop your rate by at least 0.5% and 210 days have passed since your first mortgage payment, you may qualify. VA also requires the refinance to recoup costs within 36 months, though in most cases, it’s much faster.

What makes this so impactful is how it ties into what we call our “Client 20-Year Vision”—having a home paid off or nearly paid off by retirement.

Here’s how: if you refinance through an IRRRL and save, say, $200–$300 a month, you can apply that savings directly to your principal. That accelerates your payoff, sometimes chopping years off your mortgage while keeping your monthly payment about the same as it was before.

We even use a tool called Rate Radar that tracks when our clients become eligible for a VA streamline refinance. That way, we can let you know the moment you can save money and pay off your home faster.

Recap

So, what are the three best features of the VA loan?

No PMI — even with 0% down.
More competitive interest rates — lenders get paid more for VA loans, so you should too.
Streamlined refinance (IRRRL) — a fast, low-cost way to lower your rate and pay off your home early.

My name’s Evan Kaufman. I hope this helped explain the three big benefits of the VA loan. Take care!

Don’t Fall for These VA Loan Myths

matt — Mon, 21 Jul 2025 20:28:42 +0000

How Do Dependents Impact the VA Loan?

matt — Thu, 26 Jun 2025 17:21:09 +0000

“I had another kid—how’s it going to impact my VA loan?”

My name’s Evan Kaufman, a VA loan originator, here to help explain.

So—kids, or let’s just say adding dependents—can those really affect my VA loan qualifications?

Yes, they can, and we’re going to talk about two major reasons or areas where it impacts you.

1. Residual Income (The Less Positive Impact)

First, we’re going to talk about residual income, which is a key part of qualifying for a VA loan.
Then second, we’ll talk about a more positive angle that can actually improve your qualification.

So let’s start with residual income.

You’ve probably heard the term debt-to-income ratio (DTI). It drives a lot of decision-making in mortgages. That’s where we take your total monthly debts, divide them by your total monthly income, and get a percentage. That ratio determines your general borrowing ability.

Now, with VA loans, there’s an extra component that’s unique compared to all other loan types:
It’s called residual income.

Yes, DTI still matters. However, the VA really focuses on this concept of residual income to make sure a veteran still has enough breathing space to comfortably afford the home.

That’s why, in other videos, I’ve said that you can sometimes have a higher DTI ratio with a VA loan than with other loan types—because they’re looking more at residual income than just DTI.

Residual income isn’t a simple calculation. It factors in:

Your taxes
The square footage of your home
Your region of the country
And—your family size

So yes, the number of dependents you have can affect your qualification for a VA loan.

Again, this isn’t necessarily a negative, but it does decrease your borrowability slightly. We’ll get to the positive side in a moment.

How Does It Work?

There’s a chart the VA publishes each year showing the minimum required residual income for different regions of the country—broken out into zones like the Southeast, Southwest, etc.—and by household size.

For example, if you’re a family of two, there’s a certain minimum monthly amount of income you need to have left over (after debts, taxes, etc.) to qualify.
If you’re a family of four, that number goes up.

So effectively, the VA is saying:

“This is the minimum amount of money we need to see you retain after all expenses to ensure financial stability.”

The more kids you have, the higher that required number goes.

Now—don’t worry—this doesn’t mean “Don’t have a kid” before applying for a VA loan.
It’s not a massive increase, and we’re definitely not trying to implement population control here!

(I love kids, by the way—I’ve got four of them!)
We just want to make sure you’re aware that if your loan officer is asking for clarification on dependents, it’s because it impacts your VA loan qualification.

And if you undermark the number of dependents—or you skip that field thinking, “Ah, it doesn’t really matter,”—you could be in for a surprise later.
It could even jeopardize your loan if the information has to be corrected mid-process.

So always make sure the number of dependents is accurate, because that directly affects the residual income calculation for your VA loan.

2. VA Disability Compensation (The Positive Impact)

Now, here’s the positive side:

For veterans who have VA disability income, adding a child can increase that income.

If you’re receiving VA disability compensation and you have another child, you can apply to add that dependent to your claim.

Doing this will result in additional monthly income—and that can make a meaningful difference in your loan qualification.

We’ve seen folks going through the home search process have a child and then update their VA disability claim. They get an extra $60 to $90 a month, sometimes more.

That additional income could translate to thousands of dollars in extra borrowing power over the life of the loan.

So if you receive VA disability compensation, don’t forget to file that update for every new child. Work with the VA to make sure it’s added.

Summary

So there you have it—the two ways kids (or dependents) can impact your VA loan qualification:

Residual income requirements go up slightly with each dependent, which can reduce your borrowing ability.
VA disability income can go up with each dependent, which may improve your borrowing ability.

My name is Evan Kaufman, your VA loan originator.
Take care.

Do VA Appraisals Cause Problems?

matt — Tue, 06 May 2025 14:55:36 +0000

I’m using a VA loan — or I’m a home seller and I’ve accepted a VA loan offer from the purchaser — what are things I should look out for in the appraisal process?

My name’s Evan Kaufman, your VA loan originator, here to help walk us through this.

From the Buyer’s Perspective

So first, we’re going to look at things you should know from a buyer’s perspective — what to be aware of when you have your appraisal done.

Then we’ll flip it and look at it as a seller — what are some things you need to be ready for?

First up, I want to make sure everyone understands something:
Sometimes people assume that the VA loan comes with some kind of VA inspection to make sure the home can appraise properly. That is not the case.

The VA does coordinate an appraisal, and there are specific VA appraisers.
But here’s the thing — they’re just regular appraisers. Most of the time, they’re doing other appraisals as well. They just happen to have a VA designation.

So when people say, “Oh no, we’ve got to bring in this certain person from somewhere,” — no, it’s usually just the general appraisal population, and they’ve been approved to do VA appraisals.

The VA sends them out, and they perform a standard appraisal.
But on top of that, they do something I like to call a habitability check, where they’re looking at some Minimum Property Requirements (MPRs).

We actually have a great blog post that outlines these minimum property requirements in detail — but know this: it’s not a home inspection.

So, if you’re a buyer, be aware:
A VA appraisal — even with the MPRs — is not a substitute for an actual home inspection.

Common Issues VA Appraisers Look For

What are they looking for?

Some of the most common items we see:

Peeling paint
Windows that don’t open properly
Random safety issues

As I always like to say: If there are no holes in the walls, you’re probably going to be okay.

Other things that get flagged often:

Exterior railings missing, especially on steps
Trip hazards or other obvious issues

If you’re buying a newer home, we rarely see anything called out.
In fact, most VA appraisals come back as “as-is,” meaning they’re good to go with no changes needed.

But remember — MPRs can vary based on the appraiser. They each follow a standard code, but how detailed they are can differ. So again, don’t skip your home inspection.

Now, Let’s Talk to Sellers

Let’s put our seller’s cap on.
You just accepted a contract, and it’s a VA loan. You might be thinking:

“Oh no, I was told there’s a VA inspection. What is that?”

Well, good news — it’s not a traditional home inspection.
In fact, it’s less of an issue and typically less of a burden than a buyer’s inspection.

Again, the VA doesn’t conduct a separate “inspection.” They coordinate an appraisal that checks minimum property standards, but it’s not meant to nitpick like a full-blown inspection might.

If your home is newer — especially post-1980s or 1990s — we rarely see issues.
Sure, there are occasional exceptions, but they’re uncommon.

If your home is older but well-kept, again, we usually see no issues.

Just be aware, the most common red flags are:

Peeling paint
Window functionality
Major cosmetic damage (e.g., holes in walls, missing fixtures, ceiling damage)

Again, it depends on the appraiser, but don’t be afraid of it.

Timing: Appraisals and Inspections

In many cases, we schedule the VA appraisal alongside the inspection.
That way, you get everything — any issues — discovered around the same time.

Just keep in mind:
A home inspection is going to be far more thorough than what any VA appraiser will call out.

Bonus: The “Tidewater” Rule

Here’s a cool kicker about the VA loan and appraisal process.

While, yes, there are those habitability checks — and they can differ a bit from conventional — the conventional loan process can flag issues too. If there are glaring problems, they’ll either reduce the appraised value or make it “subject to” certain repairs.

But the VA loan has one unique advantage:
It includes a process called Tidewater.

We’ve got a great video on this — or just search for “Tidewater” on our YouTube channel or website.

Here’s how it works:

If the appraiser is having trouble valuing the property — meaning they think it may come in low — they are required to notify the lender before finalizing the report.

This gives the lender and agents an opportunity to submit additional comps or information that may support the contract value.
No other loan type allows this kind of access or communication with the appraiser.

Why It Matters

For buyers, that means you’re less likely to get blindsided by a low appraisal.
And for sellers, it gives you a chance to defend the value before losing the deal.

It helps avoid those awkward situations where a home underappraises, and the seller just says, “Too bad,” or the buyer has to come up with a lot of extra cash.

The VA loan helps mitigate that, thanks to the Tidewater process.

Final Thoughts

So, those are some of the unique things about the VA appraisal process, and what to expect if you’re a buyer or a seller.

My name’s Evan Kaufman, again — your VA loan originator.
Thanks for watching.

Take care.

What Does it Mean to Lock a Loan?

matt — Fri, 14 Feb 2025 15:47:01 +0000

Transcript

What is Clear to Close in Lending?

matt — Fri, 03 Jan 2025 17:36:43 +0000

Transcript

I just received the clear to close on my home loan. What the heck does that even mean?

My name is Evan Kaufman, your VA loan originator, here to help explain.

Clear to close means exactly what it says—you are now clear to go close on the home. However, there are still some steps that need to be taken before you get the keys to your home, or the ability to move in and officially own it.

For us—and for most lenders that I know—clear to close means we have now passed all the conditions needed from the financing perspective to proceed with closing on the home. That means all those requests for new pay stubs, tax information, and similar documents are resolved. The title has been reviewed, things are looking good, and we’re ready to move forward.

However, there are still typically a few small steps between getting the clear to close and actually funding your home loan.

The biggest step in this process is usually balancing with title.

What does that mean?

Balancing with title—or the attorney’s office, depending on the state you’re in—means ensuring that we, as the lender, finalize the numbers on our end. At the same time, the title office or attorneys might have their own numbers, and we need to ensure they match up.

You can prepare for this in advance by reviewing some preliminary numbers leading up to closing. But once we have the clear to close and your closing date is set, we must finalize everything. This involves balancing the final figures so that you, as the borrower, can receive an exact final number.

For example, we, as the lender, will say, “Here are our final numbers,” and the title office will confirm their numbers. Both sides will reconcile, ensuring they match up. Once they do, you’re good to close.

From the lender’s perspective, getting the clear to close means we’re ready to rock and roll! But we still need to finalize everything with the title office. They may need to work out some additional details with us, but that’s typically the final step.

Sometimes, if you get the clear to close late in the process—like on the day of closing—there might be a fast turnaround to balance everything. However, in most cases, you should receive the clear to close a few days, or even a week or more, before your actual closing date.

The timeline depends on several factors, such as how quickly the process is moving or any delays with inspections or appraisals. If inspections or appraisals take a long time, that can push back your clear to close.

Here’s the good news: When you hear “clear to close,” you can usually breathe a sigh of relief. It means that pretty much all the mortgage-related stuff is done. The final step is balancing the numbers, receiving your final figures, and preparing to officially own your home.

That is what clear to close means and how it can impact you when you’re buying your next home.

Take care!

How Much House You Can Buy vs How Much You Can Afford

matt — Tue, 24 Dec 2024 16:20:17 +0000

Transcript

This video comes off the heels of another one I just did, where I mentioned: “Hey, pay off debt to get more debt.” Now, we’re going to talk about how much you should actually pay for a home versus what you could pay for a home.

What You Can Afford vs. What You Should Pay

Often, when working on loan applications, I like to tell folks:

There’s the amount you can be qualified for, and
There’s the amount you might actually want to pay.

These are two very different worlds.

In the last video, and in a few others you’ll see on our site, we discussed the debt-to-income ratio (DTI) and how it really impacts what you can afford on a home—assuming everything else in the mortgage application is relatively clear.

The DTI is a key metric lenders look at, essentially saying, “How much of your income is going toward debt payments?”

High DTI Ratios: A Red Flag for Your Budget

Here’s a shocker: For mortgages, DTI ratios are often pushed up to 50%, and sometimes even higher for certain loan types, like VA loans. But that’s not always ideal. Why?

If half of your income is going toward maintaining debt, it’s not the best metric for long-term success in your personal budget.

This brings me to an important point: Just because we tell you that you can afford it doesn’t mean you should pay for it month by month.

A Real-World Example

Let’s take an example:

You’re making $6,000 a month and have a 50% DTI ratio.

This means $3,000 a month is going toward debt.
That leaves you with $3,000 for all other expenses.

However, that 50% DTI is based on pre-tax income. So, that $6,000 gross income might actually be $5,000 or even $4,500 after taxes, depending on where you live.

Now imagine you have a $3,000 monthly mortgage payment. With only $4,500–$5,000 in take-home pay, you’re left with very little for other living expenses. If you’re trying to save or compound your finances, this situation gets tough quickly.

What’s the Ideal DTI Ratio?

The lowest DTI ratio is, of course, the best. If you’re trying to build wealth, save, and invest, lower is always better.

What’s a good target?

Ideally, aim for 35% or less.
Around 35% is where I’ve seen many folks succeed in saving, investing, and managing a mortgage that fits their lifestyle.

If your DTI is higher (e.g., 40–50%), especially with certain loan types like VA loans, it’s worth re-evaluating your situation.

Nuances in DTI Ratios

There are always nuances to consider. For example:

If someone has a high DTI ratio (e.g., 60–70%), it might be because they’ve left a spouse off the loan application. In most states, you don’t have to count one spouse’s debts against the other.
This can make the DTI look higher on paper, but the household’s overall financial situation might still be reasonable.

That said, when factoring in all debts, including your new mortgage, it’s best to keep the DTI around 35% or less to ensure long-term financial stability.

Final Thoughts: Do a Budget First

Before buying a home, make sure you do a budget.

Get a clear idea of what’s comfortable for you.
If you have high fixed monthly costs (e.g., unique expenses), factor those in.

At the end of the day, buying a home should be a blessing, not a curse. If you’re underwater on your mortgage, it’s not going to feel like an enjoyable experience.

Remember, just because you can afford a certain number doesn’t mean you should go for it. Think about what’s sustainable for your lifestyle.

My name’s Evan Kaufman, your VA loan originator. Take care!

Pay Off Debt to Get a Mortgage

matt — Tue, 24 Dec 2024 16:12:04 +0000

Transcript

Today, we’re talking about how paying off debt can help you get more debt—oddly enough.

My name is Evan Kaufman, your VA loan originator. One way to get a larger mortgage or to be approved for a larger balance is to actually pay off some of your current debts. In this video, we’re going to talk about why that is, and at the end, I’ll go over a real example of how impactful it can actually be.

Why Paying Off Debt Can Help You Get More Debt

So, why is it that if I pay off some debts, I can suddenly be approved for more debts? It comes back to your debt-to-income ratio (DTI). As lenders, this is one of the primary indicators we use to determine whether you qualify for a home loan.

For example, if we’re looking at conventional loans (and most loan types), your debt-to-income ratio typically needs to be 50% or less. For VA loans, the requirements can be more nuanced. Sometimes, they allow a higher ratio, but it’s often based on something called residual income. Still, we need to ensure the DTI makes sense.

What Is the Debt-to-Income Ratio?

In general, the DTI is calculated by taking your total monthly liabilities and dividing that by your total monthly income, which gives us a percentage.

Monthly liabilities: These include major debts, such as installment loans or revolving credit lines (e.g., student loans, car payments, or credit card balances with minimum payments).
Things like utilities, rent, and phone bills typically don’t count in this calculation.

When we run your credit, we focus on things like installment loans, car loans, student loans, and other mortgages you might have. These are added up to get your total debt number. We then divide this by your gross (pre-tax) monthly income to calculate your DTI.

A Real-Life Example

Let’s say you’re currently denied for a mortgage because your DTI is too high. You’ve been told to pay off some debts but don’t know why or how impactful it can be. Here’s an example:

You make $5,000 a month in gross income. You have $2,000 a month in car payments and credit card debt, and you’re trying to apply for a mortgage with a $2,000 monthly payment.

Without the mortgage, your DTI is $2,000 ÷ $5,000 = 40%.
Add the mortgage, and now your total liabilities are $4,000 a month. Divide that by your income, and your DTI jumps to 80%.

This 80% ratio exceeds most loan requirements, meaning you’ll likely be denied. But here’s the power of paying off debt:

Let’s say you can pay off that $2,000 in credit cards and car loans. Now your only liability is the mortgage, so your DTI goes back down to 40%. With other factors in place, you’re much more likely to be approved.

Another Example

Here’s a more common scenario:

You make $5,000 a month in income and have $1,500 in debt (split between car payments and credit cards). Without a mortgage, your DTI is 30%.

If you take on a mortgage with a $2,000 monthly payment, your DTI increases to 70%. To improve your chances of approval, you decide to pay off some of the debt:

You can’t pay off your car loan entirely but manage to clear $1,000 in credit card debt.
This leaves you with $500 in liabilities, plus the $2,000 mortgage.

Your new DTI is $2,500 ÷ $5,000 = 50%, which has a much better chance of approval. While I wouldn’t recommend a 50% DTI long-term (ideally, aim for 35% or less), this shows how debt payments can help you qualify.

By paying off certain debts, you can reduce your DTI and potentially qualify for a larger mortgage. This could allow you to afford a home in the area you want to live in or one that meets your needs better.

For example, if paying off a $300–$500 monthly debt lowers your DTI by 10–15%, that could allow you to qualify for $50,000–$100,000 more in home value.

My name is Evan Kaufman, and that’s how strategically paying off debts can help improve your DTI to qualify for a mortgage and, ultimately, secure a new home.

The VA Funding Fee Explained

matt — Fri, 06 Dec 2024 21:14:37 +0000

Transcript

What is the VA Loan Funding Fee?

I’m going to explain the VA loan funding fee, and at the end, I’ll share how this fee can ultimately be waived. My name is Evan Kaufman, your VA loan originator.

What is the VA Loan Funding Fee?

The VA loan funding fee is a fee charged directly by the Department of Veterans Affairs (VA) to VA homebuyers. This fee helps support the VA loan program as a whole. It is not charged by the lender; instead, it comes directly from the VA at the time of closing.

There are three ways to pay the VA funding fee:

Paid by the buyer at closing.
Paid by the seller at closing.
Rolled into the loan amount, which is the most common option.

The funding fee is the one closing cost that can be rolled into a VA loan. When people hear, “closing costs can be rolled into a VA loan,” they are usually referring to this fee.

How Much is the VA Funding Fee?

The amount of the VA funding fee depends on several factors, including down payment and whether it’s your first use of the VA loan benefit or a subsequent use:

0% Down Payment:
- First-time use: 2.15% of the loan amount.
- Subsequent use: 3.3% of the loan amount.
5% Down Payment:
- Funding fee drops to 1.5%.
10% Down Payment:
- Funding fee drops to 1.25%.

Putting money down on a VA loan can significantly reduce the funding fee, which is why we often recommend this option to our clients.

VA Funding Fee for Refinances

If you’re using a VA loan for refinancing, the funding fee structure changes slightly:

VA IRRRL (Interest Rate Reduction Refinance Loan): 0.5% of the loan value.
VA Loan Assumption: 0.5% funding fee.
Cash-Out Refinance: The funding fees for a purchase loan apply.

How Can the VA Funding Fee Be Waived?

The VA funding fee can be waived under certain circumstances:

VA disability compensation: If you have a disability rating of 10% or greater.
Purple Heart recipients: Active-duty service members with a Purple Heart.
Surviving spouses: If you inherit VA loan benefits due to the death of your spouse.

According to VA estimates, nearly half of veterans may qualify for a waived funding fee due to VA disability compensation.

Important Notes

For active-duty service members, the funding fee waiver is more challenging to obtain unless they are Purple Heart recipients. However, for veterans, disability compensation is the most common way to have the fee waived.

Why Consider Putting Money Down?

Reducing the funding fee is one reason to consider making a down payment on a VA loan. More importantly, it helps you build equity in your home faster. At our firm, we focus on helping clients achieve long-term financial independence, and putting 5% or 10% down can be a big step toward that goal.

Checking Your VA Loan Eligibility

To determine your VA funding fee and eligibility, we’ll review your Certificate of Eligibility (COE). The funding fee depends on:

Your down payment amount.
First-time or subsequent use of your VA loan benefit.
Your eligibility for a waiver due to disability compensation, Purple Heart status, or surviving spouse benefits.

Final Thoughts

The VA loan funding fee supports a program that has helped countless veterans and active-duty members achieve homeownership. While it can add to your loan costs, there are ways to manage or even eliminate it.

If you have questions about the VA funding fee or need help pulling your COE, reach out to me. My name is Evan Kaufman, your VA loan originator, and I’m here to help. Take care!