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How To Build A House With A VA Loan
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- čas přidán 14. 08. 2024
- How do I build a home using my VA Loan is one of the most common questions I am asked as a Veteran Mortgage Advisor. In this video I break down the two main VA Loan Mortgage strategies you can use to accomplish this. Each strategy is super dependent on your situation and the builder you are choosing to use!
As always if you have questions about how to use your VA Loan benefit, you can reach me at www.phildodds.com
You can find me on Instagram at / phildodds
Builder here, I'm charging the client the interest. I'd recommend to clients to have a "time is of the essence" clause. I'm building as quick as possible, alot of GCs don't.
This is a great point! Thank you for that feedback!
Are you guys building in every states or just specific states? Anyways, love the video and all the info. Can you do a video with VA loan for second time and not a first time buyer. Thanks in advance
@@ziggdemaster4435 Absolutely will get that video up!
Sir. Great video. Just to be clear on waiving of fees for 100% service connected Veterans. Which fees can be waived? My understanding is that the VA has numerous fees associated with a construction loan. See below. Can you comment? Thank you.
• VA funding fee. Covers the costs of guaranteeing the loan but is waived for disabled vets. It is also the only fee that can be rolled into the purchase loan. You must pay this fee within 15 days of closing.
• Appraisal fees. Vary from $525 to $1,550, depending on where you live.
• Closing costs. The average is 2% to 5% of the total loan amount.
• Origination fee. The administrative tasks necessary to open a new loan.
• Construction fee. Up to 2% of the loan amount.
• Additional/Misc/Other Fees. Builder, Inspection, Hazard insurance (during construction), Title update, Interest payments (during construction), Property taxes (during construction).
Only the VA Funding fee. All other closing costs you will be responsible for.
@@phildoddsmtg Thank you very much.
Great info. Just starting the process. And I'm lost again, ha.
Ha Ha! Happy to help if you need a resource!
@@phildoddsmtg I'll be in touch through your website in the coming days.
Great info - thanks!
Absolutely!
Sir. One more question. I'm confused on what party assumes responsibility for the interest payments. I have one source which indicates that the builder is responsible for the interest on the draws. You've indicated that the Veteran/Homeowner is responsible for the interest. Are there different type of interests involved in a VA construction loan?
Whoever is holding the construction financing is responsible for the interest during the construction phase. If you, the Veteran, are doing a VA construction loan then you will be paying the interest. If your builder holds the financing and you essentially purchase the home at the end of construction from them, they will pay the interest. However, I can guarantee that they will bake those costs into the final bid price of the home. So really no matter which way it goes, you’re paying for it.
@@phildoddsmtg Thank you sir.
Doesn’t getting an insecure loan while getting a home loan hurt you chances of getting approved? I’ve heard of people applying for more credit/debt while in the process of getting a new home and got denied approval when the lender rechecked their credit. Their DTI ratio goes up.
It absolutely can. This is why it's so important to talk to a lender and have a plan before getting into the building process.
Do you recommend shopping for a builder first or looking for a lot/land first?
That super depends on your needs. If you’re looking to stay in a certain school district then maybe finding a lot first would be more beneficial and then getting the builder involved to design a hime that would fit on that lot. If you don’t have a lot of geographical restrictions with your wants, then it would be best to design a home you’re happy with and then find a lot that can accommodate. A good example would be if you want say a walkout basement. Not all lots can accommodate a walkout.
What if you're the veteran and the builder? Also I already own the land and I'm 80% service connected disabled?
Not a problem as long as you’re a licensed builder and have a valid VA Builder ID. If you, don’t you would just need to register your company with the VA and meet their builder requirements.