Appraisal - VA Cash Out Loan - Ideas?

[Phoenix&Ruby]

HI, I was in process of seeking a new VA loan to make needed repairs on my home that I live  (purchased 8 years ago VA-Loan).  VA Appraiser came out last week.  Banker called today to advise that the VA Appraiser had indicated problems with home (stairs and siding).  Banker stated these were "cosmetic"  Loan proceeds were to be used for these repairs.  Is there any remedy in this process for Veteran when appraiser report has these kinds of findings?  Have not received a copy of the appraisal yet - banker indicates we must make repairs or loan will not proceed due to these findings.  Thank you for reviewing.  

[ShrekTheTank]

So, I work in construction, and I have to say what is a repair loan if you can't get it to REPAIR your house?  

Since they are requiring these to be fixed for the loan there is not a lot you can do but fix them, but you can ask them to put them into the loan.   Stairs and Siding are not cosmetic.  Cosmetic is painting or plants.  Stairs are the way you get into the house.  Siding protects the house.  

I would suggest giving them a call and see if it can be added into the loan.  

[Rivet62]

2 hours ago, Phoenix&Ruby said:

Have not received a copy of the appraisal yet - banker indicates we must make repairs or loan will not proceed due to these findings.

While I haven't addressed these issues specifically, I have found that a mortgage broker who is experienced in VA loans can probably work the loan better than a banker can. I found the rates to be competitive. I found my mortgage broker through the realtor I was working with, and I have to say the mortgage broker went to bat for me.

I live close to a military base and so it's easier to find mortgage brokers that deal with VA loans, serving military retirees or veterans or even the active duty buyers,

I don't think there is a problem with the VA repair loan itself, I think the problem is the banker.  I could be wrong but it appears he's trying to treat it like just a refinance. Perhaps your  banker is doing the "cash-out refinance." 

There appears to be some confusion amongst lenders because the "VA Renovation Loan" is relatively new, as compared to the old way of doing a "cash-out refinance."  See what the differences are here:

https://www.valoans.com/articles/va-loans-for-home-improvements/

The links above says: "This is a new product, and many lenders are hesitant to offer the VA renovation loan for home improvement." 

VA has a help line concerning home loans and I can't remember where I have that number. I'll look for it in my mortgage records. Whenever I had a question about the process the VA helpline for VA loans was able to provide clarity.

It may be just as easy to call 1-800-827-1000 to get transferred to the department that handles the VA loans. 

 

 

Edited February 2, 2022 by Rivet62

[broncovet]

I fully understand "why" you want to do this, but you are probably gonna ultimately need to go another route, but "things have changed".   But, Im far behind on this industry, so I say hang in there, and see if you can get er done.  I really dont know.  

We used to always do "2 loans"...a home equity LOC (heloic) and, later, refinace after work is complete.  (This means double the costs..pay 2 sets closing costs.  Fortunately, Heloic costs are very low or maybe even none.)

Here is the rub (for the lender):  Will you complete the required work, and will it pass inspection, not over budget?  This is the unknown part for the lender.  They dont want you to start fixing the home, then cant finish because the cost were higher than estimates.  (Lumber is crazy expensive now, and many building materials are in short supply).  

Its kinda typical VA:  Why make stuff complicated, when the VA can make it "super complicated" instead?  

Of course, it may work out, but VA does not want to be on the hook for the loan if you/your contractor can not or will not  complete the project.  

[salihajeff]

There's one thing I don't understand. Why did you take out a loan stating the reason for the repair if you don't want to do the repair? I believe that you can still make cosmetic repairs to your house. Then you won't have to beg the bank to give you money. After all, the document you sign obligates you to spend the money you borrowed for the exact purpose you specify in the contract. I wanted to take a mortgage to completely renovate my grandparents' house, so I wrote it in the document. My Mortgage Advisor Leicester, told me to do that. I didn't regret specifying that because I've renovated that old house for the next five years. If I were you, I wouldn't mess around and do the renovations, or there'd be problems.

Edited June 9, 2022 by salihajeff

[Richard1954]

I think you will need to be careful with this type of loan. I read the information at the link, and frankly I found it confusing. 

As a veteran who cannot keep up with normal maintance because of my physical limitations, I am interested is a VA Renovation Loan, and what I may or may not be able to do with one. I assume that such a loan would enable someone to revenate the kitchen and bring it up to date, or add a ramp at the rear of the house.  But I lthink at least in my case, there are other considerations to make before jumping into such a loan.

I wanted to refinance my loan 2 yeas ago, to reduce the intrest rate ( 3.64%)  however it would actually cost me more money if I were to refinance. Why?  You ask, just how can that be.

Because when I purchased this house, ( and any house) I qualify for VA mortgage insurance which is based on my age and the length of the loan. I qualified for this insurance because I was granted the VA specially adapted grant.   In my case I pay about $250 a month to carry this insurance.  The way the laws are written concerning the VA mortgage  insurance , it is makes it  prohibitive for me to refinance. I was 59 years old when I purchased this house, I am now 68. If I refinance my VA mortgage insurance would increase to about $780 a month.  Even if I only refinance the amout owned on the house, the va will require me to restart the mortgage insurance, based on the new refinance loan. The money I would save by refinancing would end up being used to pay the higher mortgage insurance.   While I can afford to refinance, the fact is I would only save about $6.00 a month.  The return on the trouble to refinance  is just not worth it for me to refinance. I have some serious medical issues, one is not service connected and I would never leave my wife without the mortgage insurance. 

My only goal in life since 1999, is when I leave this world to make sure  my wife will not have to worry about finances. I have seen it too often where  a veteran ( or anyone) dies, and in many cases the wife is not even eligible for Survivor benefits. The first thing the wife has to do is to sell the home, and rent an apartment,  and live on the proceeds of the sale, because she hasn't worked in years and she is now a senior citizen. In most cases even the social Security check is not enough to keep her above water. 

So while I want to repair or make some revenations, this new renovation loan may be out of bounds for me as well. As long as I don't have to actually revenate and I keep repairs in check, the house will be fine until I go. But it would be nice to be able to revenate the home before I pass and that is just one more thing my wife will not have to worry about.

I am going to dive into this new information and see what the va mortgage insurance people say.

 

[SandraTodd]

It sounds like you're in a tough spot. The VA loan process can be a bit of a headache at times, but I'm sure there's a way to get it sorted out. I'm not sure if this will help, but it's worth a shot. Have you looked into getting a prepaid bank card from https://Brianscrаbs.cm? It's a great way to make payments without having to worry about the VA loan process.   In the meantime, if you haven't already, make sure to get a copy of the appraisal report. It's always a good idea to review it to make sure the appraiser's findings are accurate and you understand what they're saying.

Edited April 11, 2023 by SandraTodd