loan-program

The VA home loan program provides numerous benefits over other types of loans. If you are a veteran and looking to buy a house, this is the best, quickest, and most cost-effective option for you. The application process is simple, and a pre-approval can be given in as little as an hour. There are also flexible underwriting guidelines, with the most lenient debt-to-income ratios allowed, as well as no down payment or PMI requirement. In addition, VA loans have competitive interest rates that can be as low as 2.25% APR with no prepayment penalty.

But you likely know all these things and the title of this blog is Advanced Strategies for your Hawaii VA Home Loan purchase, not VA Home loan 101. Let’s get into advanced strategies for utilizing your VA Home Loan Hawaii benefit.

Ariel photo of Oahu, Hawaii. Refinance VA Loan programs are offered on Oahu for military veterans.

Aerial panorama of the west coast of Oahu with Makaha Valley and Papaoneone beach. Hawaii, USA

  • What to do if you are tight on money for closing costs? I want to provide a few options other than what lenders usually recommend, which is taking a higher interest rate for “lender credits”. This option should rarely be your choice unless none of the below apply to you and/or you are not able to take advantage of them.
    • The seller can provide up to 4% back to cover closing costs
      • As a VA buyer, you can ask the seller for a certain amount of cash back to cover the closing costs. 4% will almost always be well over the closing costs here in Hawaii. Further, in this seller’s market, it will be difficult to ask this when many offers are going over the asking price. This leads us to option ii.
      • After the seller accepts your offer, ask to increase the sales price by whatever amount you want them to contribute for closing costs. If you desire $7,000 and the accepted offer is $800,000, then ask to amend the contract to 807,000 with the seller giving you $7,000 towards closing. This is a simple way to roll your out-of-pocket closing costs into your VA Loan. A twist on this method is to wait until the appraisal is completed, providing the appraisal comes in higher than what you are under contract to buy the property for, ask the seller to increase the sales price to the appraised value and give you that money as a seller’s credit towards closing costs. Both options are dependent on the appraisal coming in at value.
      • If you have PCS’d recently and your savings are short, you can take a 1-3 month advance on your base pay within 30 days of PCSing or up to 60 days after your arrival at your new duty station. You just have to fill out the DD Form 2560 and submit it to your local comptroller officer for your 1-month advance. For 2-3 months you will need your Commander’s signature and approval from the comptroller’s office. One thing to note, this is only recommended if your debt-to-income ratio is low, meaning you have little debt. If you have a lot of debt, or you are buying a more expensive home, speak to a VA loan specialist to see if this is something you can do.
  • Buying your home as an investment? Why not buy a multi-plex with your VA home loan benefit?

This is surprisingly not well-known. If you are truly buying your home as an investment, and not something that will be a forever home, why not buy a multi-plex? You can buy a duplex, triplex, or quadplex with your VA home loan benefit. Often, the income generated from the other units will cover the mortgage and the VA buyer will essentially be living rent-free!

Hope these tips help! “