The majority of properties for sale across the state of California are short sales. Just like any other property for sale, you can use you VA loan eligibility to qualify for VA financing to buy short sale properties listed on the market.
A short sale is a property for sale where the owner’s mortgage balance exceeds the market price. So that owner has to go through a long negotiating period with their lender before their lender will OK the sale. Here are some bullet points to keep in mind when getting VA financing to buy a short sale in California:
- The property may be listed in the market, but the seller may not have begun the short sale negotiations. Keep in mind that it can take 2-9 mos to negotiate the short sale.
- Look for short sales that have already been approved at a price by the seller’s lender, these will go faster. Often it will state in the MLS that the short sale is “approved”.
- VA loan requirements require a termite clearance report before the VA lender will fund your loan. With short sales the seller often will not pay for termite repairs to get a clearance and either will the bank agreeing to the short sale. Keep this in mind.
- VA loan appraisals will often ask for small items to be fixed before the VA lender will fund your loan. Same as above, seller and bank most likely will not make these repairs
- Sometimes the 2nd mortgage holder on a short sale will want the seller the pay extra money to them for their 2nd mortgage. The seller will often not pay these and may ask you the VA buyer to pay for this.
Short sales can offer some super bargain buying opportunities for VA borrowers, but just keep in mind some of the above points that can make these non-standard purchase transactions.
Below are some of the most up-to-date advantages of VA financing today:
- Where many other loan programs such as FHA and conventional have tightened their lending guidelines, VA financing remains essentially unchanged & is very flexible
- VA loan guidelines require ZERO down payment
- VA loan limits go up to $962,750 with zero down in many California counties such as Contra Costa, San Mateo, San Francisco, and Alameda. Los Angeles, Orange, Santa Clara and San Diego also have very large VA loan limits with zero down payment.
- You VA loan credit score does not have to be perfect
- VA refinance loans are quick and easy and the VA loan rate remains at 60 year lows
Feel free to email me at homeloan8@gmail.com or call at 858-922-7899 if you have any questions about getting approved for a VA loan in California.
Have a wonderful Thanksgiving weekend. And a special huge thank you to active duty military serving the country away from their families during this holiday weekend. Your sacrifice is great and it is greatly appreciated.
Best Regards,
Rob Chomentowski
Sr. Loan Officer (and VA specialist)
858-922-7899
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