Just went through this a few years ago.
Was forced into buying a home on short notice.
The landlord sold the house we were renting so we had 90 days to vacate.
After looking around we decided its was actually cheaper to buy rather than rent.
This was at the height of the housing shortage 3 years ago.
Used my VA loan option and Zero down and still put out almost 8,000 dollars with escrow,closing,inspections,earnest money and other misc out of pocket .
Caught us unprepared but we made it happen.
Zero down is very misleading.
That can be a shocker! But actually, $0 down is not misleading at all. You just didn't have a lender who carefully explained that all mortgages have closing costs, above and beyond a down payment. I would have, right at the start of the process. That's part of the benefit of working with another veteran.
Here's the difference between the down payment and the closing costs. The amount of a
down payment is deducted from the sales price to determine the loan amount and is your starting equity. Most loans, other than VA and USDA, require a down payment of at least 3.5%.
VA does not.
Closing costs, on the other hand, are the costs you are charged to get a mortgage - Title fees, appraisal, credit check, underwriting cost, brokerage commission, pre-paid taxes and insurance, etc. All loans (except VA) have these with few limits. But with VA loans, some of the closing costs are strictly limited to 1% of the purchase price. Additionally, the seller can give you up to 4% seller concessions to help cover your closing costs. In many cases, that will pay them all.
There are several other benefits to a VA loan which others don't have. Normally, with under 20% down payment, you pay an additional fee each month called
private mortgage insurance, or PMI. With an FHA loan for example, you pay extra each month and also pay an up front PMI of 1.75%. This insures the lender against possible foreclosure. With a VA loan, there is no PMI with $0 down on a VA loan - the only low down payment mortgage without it. If you have a funding fee for the VA loan of 2.3% or 3.6%, it can be rolled into the loan and it's what the government uses to guarantee 25% of the loan amount to the lender. A service-related disability or Purple Heart normally waives the funding fee.
I'm sorry your experience wasn't great. Ask anyone on here who's used me for a loan what they thought of me after the process was over. If you ever have questions about another mortgage, VA or not, let me know. I'll make sure you're up on each and every part of the loan process whether you use me or not.
