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This is a GREAT question. If you don’t know, the VA loan allows for up to 4% debt payoff, as part of the mortgage balance. What does this mean?
Let’s take a hypothetical $250,000 dollar home. This means you can roll as much as $10K in debt payoff into a home purchase (credit card, car payoff, etc.). This has a couple of caveats, including home appraisal price — the home must still appraise for the contracted sales price or higher.
That’s great, right?! It can be. Who wouldn’t want to trade 10-15-19% credit card debt for 4-5% on a mortgage? It all depends on price point and long term goals. If you’re considering holding the home for a short time, this may not be the best use of the money.
Email me or call at 719-440-6626 and let’s talk options.
This is not legal or financial advice; always consult a qualified professional in their field of expertise.