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Why Should Sellers Consider a VA Loan Offer?

What’s so great about the VA Loan Program? Today we get the inside scoop with Kelly Hesaltine. Kelly is a Senior Mortgage Consultant for Prosperity Home Mortgage, with ten years experience serving clients in Virginia, Maryland, and The District. Kelly is a big fan of the VA Loan Program, and breaks down some of the perks as well as some of the misconceptions that sellers may have about the program.

 

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Adam (00:04):

Welcome to the very first episode of Keepin' it Real. I'm your host, Adam Tabaka, and today we're talking VA loans with Kelly Hesaltine. Kelly is a senior mortgage consultant with Prosperity Home Mortgage. She has 10 years of experience serving Maryland, Virginia and The District. Kelly and the team in Old Town have ranked top in the company, three of the past five years. She's always up to date with every new change in the industry and she provides her clients with exceptional service. So without further ado, I present the one, the only, Kelly Hesaltine. Kelly, thanks for joining us today.

Kelly (00:44):

My goodness, thank you so much Adam. That's quite the introduction. I got a lot to live up to here. [inaudible 00:00:49].

Adam (00:48):

Oh, yeah.

Kelly (00:51):

Oh, good stuff.

Adam (00:52):

You always live up to it. You've been in the mortgage business now for 10 years, but give us a little background about yourself and how you ended up where you are today?

Kelly (01:03):

Absolutely, thank you for asking. And thanks for having me on the call today, too. This is super exciting stuff and something different for us. So I'm glad we're making it happen finally.

Adam (01:12):

Absolutely.

Kelly (01:13):

Yeah, so I started out as a real estate agent. I actually got my real estate license back in 2007. I had met a woman who was kind of Top 30 Under 30 and we just jived, and she's like, "I need you on my team, let's do this." So took a leap of faith, left my salaried position right as the market was crashing and foreclosures were picking up everywhere and headed on over to real estate because that made sense. But it honestly was just the best transition for me. So, I did that for about four years and then switched over into the lending side and it was just, again, a connection I had in the office and an opportunity that I really wanted to look into and thought it was pretty important to see both sides of the industry as well. This is an exciting industry that we're in and I feel pretty fortunate to have a little bit of that real estate experience on one side, and then now lending is probably where I'll stay, but I really do enjoy it.

Adam (02:06):

And I'm sure that gives you a perspective that most lenders don't have an understanding of what an agent is looking for and what the buyers are looking for from a different perspective that not everybody has probably.

Kelly (02:21):

Yep. I see that a lot actually. And a lot of questions come through on the phone and emails, and I don't want to cross lines and answer questions that are so much agent-related. But it is nice to understand where they're coming from or what these buyers are feeling. And just even being on that agent side when you guys need things, nights and weekends, I know what it's like when you got to get in touch with someone. So, I think that's a good little relationship to pull it off all circle there.

Adam (02:47):

Awesome. And you know the area well. You've been here for quite a while, right?

Kelly (02:53):

I am a local. Born and raised Alexandria. I grew up in Hollin Hall, went to Waynewood and graduated from West Potomac and still live in Alexandria. I haven't gone anywhere. I've been around here. The Parkway, everything, it's a sweet spot.

Adam (03:08):

Well, you and I have something in common. We both went to the prestigious university of Northern Virginia Community College.

Kelly (03:16):

Yes. You know.

Adam (03:17):

[inaudible 00:03:17]

Kelly (03:18):

Very much so, I'll take it. Well, it was nice to be able to work and go to school at the same time. That was just much more up my alley.

Adam (03:26):

Yeah, and I did the same thing and I ended up peeling out because I was working too much and peeling back in eventually. So...

Kelly (03:33):

Yes. We had its ebbs and flows.

Adam (03:36):

So, now real quickly before you dig into today's topic on VA loans, I'm curious, just in your experience in a general sense, what's the biggest misconception that you see among consumers who are looking to buy a home today?

Kelly (03:52):

It's a great question and I think the biggest one is really that down payment. There's great first-time home buyer loans out there but most people fear that they just don't have the 20% that you're so used to hearing. And many years ago that was the case. But the conventional loans, FHA loans, these products have really loosened up. And I think as you start to look into some of the options that they have, they realize 3%, maybe that could be something doable. With rates as low as they are right now, it's pretty sweet to see the buying power that these folks have when they are looking at as little as 3% down. That payment still keeps everything in line. I have buyers that have that 20% and maybe are choosing not to put that down right now because they want to keep some of their savings. So, yeah, 20% isn't the must, there's great options for less than that, and again, amongst those different loan programs, some different guidelines as well. But there is great flexibility on that down payment. You don't have to have a lot.

Adam (04:52):

Awesome. And speaking of rates, how many times a day do people ask you what the rates are going to look like in six months?

Kelly (04:59):

Ooh! That's a good... Every other phone call probably, if not every. But, yes, absolutely. That's such a good one. And I wish I had the answer. After last year, it's hard to say what anything's going to do. We all, I think, predicted rates would rise, all this uncertainty, and it went the other way as we saw in the numbers that the office and everybody's done last year was a good one. But yeah, the opposite, rates in the [inaudible 00:05:23], who new?

Adam (05:23):

Well, so we're talking about VA loans today, and for anyone who's unfamiliar with a VA loan, what is it and how does it differ from a conventional mortgage that people think of?

Kelly (05:39):

So, the VA loan is absolutely one of my favorite loans. It is available only to veterans. So you have to have military history, military experience, military service I should say, in order to take advantage of that VA loan. Like I said, it's just one of my favorites. I feel like it's a huge thank you when I start looking at the rates and the terms, anything we can do to give back and save these veterans a few bucks on the purchase of their new home, that's what prosperity in our team wants to do.

            For many, many years we've weighed our origination fee. We've credited appraisal fees. I think there's been over four and a half million since we started doing that, that we've saved these veterans over the many years. And it's pretty sweet to see. They're also some of my favorite clients too because they're on their A game. So it makes life really, really nice. You ask for documents and you get them. So they're just... It's a great loan, great interest rates, a lot of flexibility on it and like I said, just absolutely one of my favorites to push through.

Adam (06:41):

Awesome, awesome. Now, for folks who maybe are thinking about accepting a VA loan, because this is one of the things that I hear sometimes from sellers is that they might be a little bit scared of accepting a VA loan, especially in this market right now where we've got people who are offering zero contingency cash offers or zero contingency conventionally financed offer. It can make a VA loan at first appear to less attractive or less competitive to some people. And they see it as having maybe more pitfalls, but really it's a quality product. What though are your thoughts based on your experience in dealing with so many VA loans?

Kelly (07:35):

That's a great question. And I think the biggest, I guess issue, or what sellers or maybe listing agents worry about is the VA appraisal piece. I don't think it's so much from a qualifying standpoint, but I really think it comes down to that appraisal where they're picky. They're looking at hazards, safety items, handrails missing from four or more steps. Silly things like that. And when you're in comparison with maybe a conventional offer that has waived an appraisal, that takes all risk off of the seller. So they truly don't have to deal with it. Whether the value comes in low, lender required repairs aren't something that you see on that conventional side really, unless it's something huge which we probably know about up front anyways, what we were going to be dealing with. But, the VA, they protect those veterans. They want that house to be in good order when they move into it. And so... Oh gosh, I just totally lost my train of thought Adam, I'm so glad we're recording this.

Adam (08:32):

Don't worry about it. Yeah. We'll [crosstalk 00:08:34].

Kelly (08:33):

And the appraisal piece. Edit that little section out. So, with the VA appraisal, it can be subject too. There could be items that a seller might have to fix to get that appraisal piece approved which ultimately the financing the lendings going to go along with that. So, the VA, they're just, I think a little more picky in their appraisal piece. They also have two weeks to get the job done and you can't rush them. In other loan programs, we can order an appraisal on a rush. But I think those items are, in my opinion, they're more like a myth. That's like old school stuff.

            When you're dealing with the local lender and somebody who's got the operations and the local appraisers and VA approved underwriters on staff, we've got the ability to push those things through. So you still got the appraisal piece, but from a cumbersome loan process, we don't see that these days. And I think it's just educating these agents, as I call them as we're submitting VA offers, to just let them know the flexibility and really how... I don't know. It's a little more... It's an easier loan, say an appraisal does come in low or something like that. I think there's more wiggle room on the VA than there is on some of your other loans.

Adam (09:43):

No, that's a great point. Now, you mentioned the appraisals and the appraisers, what is the difference between a conventional appraiser versus a VA appraiser?

Kelly (09:59):

Great question. So your conventional appraiser, they're coming from the same pool. But the VA piece does add an extra level of, I guess qualifications that the appraiser has to have. You can actually make a... Let's say we started with a VA loan and we needed to switch it to conventional for some reason, that VA report because it's so detailed, would actually work on a conventional loan. It doesn't go the other way, because it's a little bit looser. They're not looking for peeling paint, window seals broken. Again, handrails missing. Some of those hazard, those safety items, health and safety items. Where you're conventional is going to be a little bit looser in the sense of what they're walking into the home and looking for. So it's not like it's a home inspection on the VA side, it's nothing that detailed, but those appraisers do really have their eye out for some of those items that the VA would flag.

Adam (10:54):

Yeah. That makes sense.

Kelly (10:54):

You can do with value, both going to be quality on that sense, it's just some of those extra subject two items that might come up on the VA side.

Adam (11:02):

Okay. Now the appraisal, it does stay with the property for a VA appraisal. Is that correct?

Kelly (11:14):

It is. So 120 days, four months.

Adam (11:17):

Okay.

Kelly (11:18):

Yep. So if there was a VA loan that maybe didn't work out because of a low appraisal, that next contract that comes in if it were to be VA would be subject to that value as well.

Adam (11:31):

Understood.

Kelly (11:32):

Good one.

Adam (11:33):

Now, I know how passionate you are, you've shown us, you've told us, what would you say to a seller who's maybe on the fence right now, thinking about whether they want to accept VA loans in general, or whether they're looking at a conventional versus a VA where they like some of the terms of the VA better, but maybe they're just nervous. What would you say to them if you were talking to them?

Kelly (12:02):

It's a good one and I have to do that often these days a little bit more. Sell that VA loan so to speak. The biggest thing I think is backing up that our appraisers are local. So even though we've got the VA aspect to it, they've got to live within five miles of that subject property. So we have somebody that's local that knows this market. And I think that's huge when it comes to that VA loan and some of your credit unions. They might be coming from an hour and a half pay market, West Virginia, you just never know where they're coming from. So, I always stress that piece. And the other question many times that they ask is, "Well, zero down, do we have any wiggle room? Should there be any appraisal value, any issues there?" And it's case by case, right?

            Some veterans need that zero down, they've got the closing costs and that's it. Others choose to take advantage of that zero down because it's a fabulous part of that loan, but have wiggle room. So when you're comparing the two in my opinion, a conventional and say a VA, an appraisal that comes in low on a conventional, I'm very limited with what we call our loan to value. I've got a minimum investment that this buyer has to have, and that's going to be based on the lower of the value if that appraisal does come in low. In that situation, maybe we have somebody who just has that 5% in the closing cost, but maybe doesn't have that additional 10 grand.

            With the VA loan, the veteran just literally is responsible potentially for any difference that could come in on that value. Maybe that 10 grand is verified. We've got the assets, we're more than covered, but we structure things with zero down so there is that wiggle room if they do need to bring a couple dollars to the table if it is low. But in my opinion, the VA loan is higher on your debt to income ratios, you just have a whole lot of more flexibility I think on that one, obviously pending the borrower's qualification than I think what you might even see on a conventional one.

Adam (14:02):

Awesome. This has been excellent information here today. Any last final thoughts you've got about the VA program?

Kelly (14:12):

Like I said, it's just a huge.. All I can say is thank you to all of you veteran out there for your service. And when you look at this VA loan and where the interest rates sit, they're a good quarter, three eight's lower than where the conventional rate is right now. We're waiving our origination fee. We do a credit for the appraisal fee. There's no monthly mortgage insurance like you might have on that conventional loan with a very minimum down payment. So again, it's truly one of my favorites out there and the veterans as well, some of my favorite to work with. So this was a treat to be able to be on this call today.

Adam (14:45):

Well, Kelly, thank you so much for joining us. Before we jump off here real quickly, tell us where we can find you if we're searching around the interwebs here and looking online.

Kelly (14:56):

Absolutely. So, first and foremost, you can call me, email me, but that'll be connected straight through, I think it's [email protected] And my last name's a funny one. So, [email protected], I always tell everybody it spelled HE-SALTINE like the cracker, and then it all really makes sense. So anyways... But yes, you can contact me through the website or my email information that I think is below and also at the end of this little podcast here.

Adam (15:27):

Absolutely. Well, Kelly, it's been a pleasure having you on there today. Thank you so much. We'll talk to you soon. Have you back again for maybe some first time home buyer or something like that, so...

Kelly (15:38):

Would love it.

Adam (15:38):

Awesome.

Kelly (15:38):

They're my next favorite because we get to teach them all the ways, the ins and the outs of things. So you've got great questions. It's wonderful.

Adam (15:46):

Absolutely. All right, thanks so much Kelly, take care.

Kelly (15:48):

My pleasure Adam. Thank you.

Adam (15:50):

All right, Bye.

Kelly (16:14):

Bye.

 

Adam Tabaka

Long & Foster Old Town Alexandria, VA - Realty
400 King Street
Alexandria, VA 22314
703-683-0400
703-589-6513
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