EP: 0043 - Will Potts on VA loans & benefits in Whatcom, Island & Skagit County

In honor of Veterans Day, navy veteran and John L. Scott Realtor Will Potts joins the podcast.
Will shares his background in the navy, and some stories from multiple trips to Iraq. Will also shares some of the many benefits of VA loans along with resources available to active military and veterans in Whatcom & Skagit county and throughout the Pacific Northwest.  

You can reach Will at willpotts@johnlscott.com

Transcript

Hello and welcome to the Bellingham Real Estate Podcast. I am Paul Balzotti. I'm here with Will Potts. Welcome, Will.

Thank You, Paul.

And this is our first podcast in the new office in the new studio. So, thank you for being the first guest in here. I'm excited about the new spot. And today we're going to talk about VA loans and resources, local resources for, active military, and veterans. And obviously, I'm having you in because you are a, veteran.

So talk to us about, well, you've been a realtor now for, what, six, seven, eight years? Nine years, nine year. Oh, my gosh, that's nine times flying, man.

It's about nine years. in a month.

Okay. All right. Yeah, that sounds very specific. Not about the nine years anyway.

Well, I that I was licensed at the end of September of 15, so a little over nine years.

All right. So nine years. Take us back. military vet, talk about your service.

Yeah, well, thank you for having me. So, it was sometime in the 80s. Top gun was out. My dad was in the Air Force, and then he was flying commercial. I thought that would be a cool thing to do. I had model airplanes hanging from the ceiling, all kinds, and reading books about that. And Top Gun and the Right Stuff was out before that.

That was a that's another great flying movie. I thought this would be a cool thing to do. Right. So I went to apply to some service academies. Didn't get in that way. I went to Georgia Tech, graduated. So. Well, now I got to start working for real. And I thought, well, let me go back and look at the military, because I had always considered that, and I appreciated that.

And my my dad, my my grandparent, my grandfather, his brother was a they were both in World War two. so there's a bit of military tradition there. And I thought, well, this would be, this would be fun, but this will be a thing to do. And I thought, well, okay, so how do I get in?

So I enlisted in the Navy, and then I applied for Officer Candidate School and got in that way in February of 95. So, I went off to OCS down in Pensacola, Florida, much like the movie not filmed up, up in Port Townsend was where it was filmed. But this is Pensacola, Florida.

For Top Gun. Are you saying how where Top Gun was filmed?

Well, okay, so the OCS movie. oh. Okay. An officer and a gentleman.

Oh, officer a gentleman. Okay.

Yeah, yeah, that that was filmed. I think it's Fort Warden, which is, just north of, Port Townsend. the outdoor scenes were filmed there. A lot of that was filmed there. so that. But that's much different, obviously, than Pensacola, Florida. So, with the, OCS there, it used to be called AOCs, which is aviation, and they opened that up to all, not just aviation, but ships, submarines and other officer, programs.

So through that went the flight school. And that's what brought me up here, was just kind of a, I wouldn't say stroke of luck, but when you're in flight school, you get the pick. It's like, well, I'd like to fly there. At that time, it doesn't fly in the Navy anymore. Was F-14, which was in Topgun, which was, and also a lot less well known airplane was the EA6 was the Prowler, which was what I flew eventually as a as a flight officer.

and there were some other airplanes. And you get toward the end of flight school and say, well, you fill out your kind of your wish list one, two, three, four. And then the Navy, much like the rest of the time in your career in the military, they decide what you're going to do. So I said, well, I'll fill this out.

And I thought, you know what? I've never been to the northwest. I think the fir, the furthest west at that time was I went skiing in Colorado. So I thought, you know, I was looking at the map. I was like, well, that'd be cool to go out there. Washington State, right? So I said, well, to do that, I need to fly the prowler.

So. Well, that'd be cool. And that was a, for for my community. That was a more, attractive thing to do. So I fill that out and I got lucky. Got that. And so that brought me up here, February of 97.

To Oak Harbor. Yeah. Okay.

To train to fly, the prowler, which took about a year. then after that, I left to go live in Japan for three years, as my first tour, operational tour. And then from there, I went all over the world, literally, back to Pensacola, back to, Oak Harbor Station as well. That's where all the prowlers are stationed now.

The growler, the F 18 G the new plan, the new, Super Hornet variant. so I flew that. I didn't fly the the new one, but flew basically up until about 2011 or so. And then, desk jobs until about 2015 and retired.

Well, let's let's back up here though. Yeah. So you went to you went to Iraq, right?

Yes.

So, was that and that was active in the middle of the second Iraq War, right?

Yes. So the first time was 98 and 99. Two deployments at that time was enforcing the no fly zone. so it was from the carrier. And,

So that's dangerous.

Yeah, yeah. In the Arabian Gulf. shot a few times, but not real risk of being shot down.

See, well, before you even said you were shot at. Just the idea of flying over there during that time, I was already scared listening to you talk about that. That's how. That's how, like. Well.

I do remember some of those flights. I forget the, the, the parallel, but the, the line where, Iraq was not allowed to fly south of, that was Operation Southern Watch. And then there was another line north, Operation Northern Watch up toward Turkey that so Iraq was constrained and not allowed to fly in those zones.

So you have to kind of you're one of them.

So we were trolling that. Yeah. but at that time they had active, surface to air missile sites, triple A, and there was, are we involved? And, and we're just flying to basically, provide a presence.

Yeah.

and not really combat ops in the sense that we're dropping weapons or and that would come later. but I think it flared up a time or two. I do remember, I think it was later in 98 that they did some strikes because Saddam was violating the no fly zones, and it was a retaliatory, we're going to take out this site and this radar site.

So, and some of those flights were interesting, but yeah.

Wow. Let me ask you one more thing on that. And then I want to get to I want to move our move along too. I mean, this is really yeah, super cool career. And I'm going to say at the end, but I must say again, thank you for your service. I mean, that's that's still, you know, that's that's brave work.

And so did you ever, when you were flying, either practicing or in, active duty, did you ever almost crash or have anything like a flight, or an airplane, communication or something that went wrong where you almost crashed or anything like that?

You know, there were times, but because you're close to the edge literally a lot that you don't necessarily realize how close you are. And some of those flights. Yes. I never had I've had friends that have ejected. I've had friends that have died in plane crashes. certainly. And so, but for me personally was some emergencies, but nothing where I thought, man, I gotta, I gotta tighten my lap belt because I'm going to be riding this seat out.

Yeah. There there was never really any like, a couple of times maybe. I thought, well, I might need this. I hope the ejection seat works today. Yeah, right. Because I might have to use it, but there were never really any instances where I thought my life was at risk. But there might have been because looking back, I know some scenarios and some instances where.

We're quite dangerous.

Yeah. So that could have gone easily the other way. Right. And but you're in the moment and you're so focused on the mission and what you're doing you don't realize. Yeah. Until later, until you're lying in your rack at night trying to go to sleep. And your mind's just racing. Yeah. At conversely, more maybe scared of things then than when I was actually in the flight.

Right. When you're on the ground just in these in these. Yeah. Combat.

So what could have happened there.

So yeah. Wow. Yeah. So I mean you know, I didn't I you had mentioned once that you had been to Iraq to me, but I didn't know that you had gone several times the way you had. So I mean.

So that was the first time and we could talk for hours. But the quick summary is, we flew back, the second time. so the first two times was Southern Watch 98 and 99. The third time was with, the second Gulf War that started, I think it was oh three. and so, I had been stationed before during that start in Bahrain as a, desk duty for a year, staff officer tours.

Then when I went back to fly, we went back to be stationed in western Iraq at a former, MiG 25 base, that the Iraqis had used. But then we took over when the second Gulf War started. So we were flying missions from that base in western Iraq to support, at that time, it was a counter IED, the, roadside bombs.

And so our platform would provide the electronic jamming to prevent or mitigate the, the cell phones, the, washing, washing machine timers, anything electronic that could trigger a roadside bomb as a convoy would go by.

Oh, yeah. That was definitely a thing.

it was a big thing. And so we were just fly missions at daytime night. You could follow the convoy. We would follow them at night. Easy to see at night with all the headlights along the road and provide that electronic jamming, which would minimize. You still might have, some bombs that would detonate just by, a manual trigger, but we would try to prevent the once electronic.

So in summary there you were, saving lives. Literally when with that mission, that which is amazing. very, very cool. Wow. So, okay, so let's fast forward, amazing service there. And you then are in Oak Harbor. You settle here. Let's let's start talking about VA loans. how do you use your VA loan? because, you know, you settle it, you know, you're you're in Mount Vernon now, right?

And, so you clearly have used your VA loan. You helped, clients, use your VA loan. how have you used kind of the VA loan? And what are some things about the VA loan, that are not necessarily widely known?

I'm glad you asked, Paul. So it's the VA. when I first got mine, was. And the first house I bought was in Florida when I went back to Pensacola, 2001, use the VA loan. I probably knew next to nothing about the VA loan other than it was called a VA loan. And and there and there was no money down required.

Yes. Anything else? I did not know. I mean, completely clueless. so that's why I, I would say fast forward a bit and so when you go to get a loan, whether a VA loan or a conventional loan, you really need to know that the mortgage broker or the bank you're working with knows what a VA loan is because there's a lot of intricacies and details.

And we'll talk about some of those, but they can be very important. So but at that time I got I had my VA loan in Florida. So the house moved up here when I bought my second house, the one I'm living in now, I didn't use a VA loan. this was back, if you remember, in the days of oh, 04, 05, 06, when loans were flying off the shelf.

Right. So I had, I think you call it a 85, 15, 5 loan. first and a second, 5% down. So we can't really get those now, right? Yeah. So I didn't need a I couldn't use the VA loan because the price point of the house.

Oh, with the VA loan limits have gone up a lot since then. Yeah.

Well they've disappeared.

There's no that's right.

There's no there's nothing more low level. Right. So that's that's one main benefit. Now there's no more VA loan limit. So you can get a loan for whatever you can qualify for.

Which is amazing.

Whatever the lender will, will give you. but I did refi that house some years later actually about three years ago with a VA refinance. Good. So not only can you buy a house, you can refinance your house if you have a current VA loan, and you want to refi it. The process is really straightforward. Yeah, and quite simple. So having gone through and I have that low and then for us now the refinance at about 3%.

Wow. So it's great. so what makes the VA loan attractive. It's probably the best loan, that you can get on the market. Yeah. as a veteran, compared to any other loan out there, really? not maybe in every single circumstance, but close. Yeah, yeah, almost all of them. And so what is a VA loan. It's a non conventional loan.

It's a non conforming. And why do you call it that. Because it's backed by the government. and that would be Jenny Mae provides the backing a VA loan guarantees up to 25% of the loan amount. So who loans the money? any other bank that you work with? Chase? major banks, local banks, WaFed.

They make the loan, but the VA backs the loan. The VA doesn't provide the money. so that's what it is. and so what makes it attractive, a backup. Just how do you qualify? Well, you have to be obviously a veteran. if you're on active duty for 90 days or more, you qualify if you're a reservist, with active duty of 90 days.

if not that, if you're just a straight reservist, then it might take it, you know, a couple of years. but there's requirements for that. And that's why I said you got to talk to a loan officer that knows the VA, and that you can get what they call a certificate of eligibility. Yeah. and it's important to have that because you can't be pre-approved until you have that basically.

Okay, this person qualifies. Now we can look at the debt to income and the and that kind of stuff to qualify. So once you're qualified and what makes it attractive. Well we've talked about there's no loan limit. it's whatever the bank will qualify you for. What? They look at your debt to income and decide, okay, we can give you this much money.

Yep.

in addition to that, the qualifying standards are generally a little bit easier. Credit scores, some lenders all the way to as low as 500. so the process they qualify and the credit requirements, the debt to income ratio is can be a little bit higher. so it's in general easier to qualify, easier to qualify, less money to no money down.

You can put some money down, but it can be a 0%, down payment loan. and then all you really have are your VA funding fee and your normal closing costs.

But you still have the rates are still lower. Lower? They're significantly lower right now than than conventional.

Rates are almost always every time you look maybe a half, maybe a percent lower somewhere in that range. and why is that? Because the government's guaranteeing basically 25% up to of the loan. So that's kind of and that leads me to the next benefit is, Because they're guaranteeing up to 25% of the loan amount. There's no PMI.

Yeah.

And so private mortgage insurance, which can add to your monthly right.

So if you have a half million dollar loan, that might be a 1% a year, which could be 5000 bucks. And that's about $400 a month of PMI that you don't have. Now some would say, well, conventional loan, you don't have a funding fee, but you're paying a higher rate. So the funding fee is kind of a, paying points, if you will.

Yeah, exactly. It's the same difference. And then can you use VA for for investment property.

Yes. So you can use them. You can use the VA for pretty much everything except the co-op and vacant land. So a condo manufactured modular home and multifamily, if you're living in one, one of the units and renting out the others. And so that rental income can help you qualify. another thing that's not well known either is that you can have more than one VA loan at the same time.

So how does that work? We've talked a little bit about the the 25% guaranteed loan limit the VA provides. That's what's also can be referred to as a VA entitlement. so let's say when I left Pensacola, I didn't sell my house, but I hadn't used my full VA entitlement because maybe I put some money down, or maybe the loan amount wasn't that high in relation to the, conforming loan limits for the county that I was in.

So when I moved up here, I had some entitlement left so I could use a VA loan. So you can.

Keep that as a rental if you want it or something. Yeah. Yeah.

I just I can't go I can't once I've maxed out my entitlement. I can't get another loan. Right. So I either have to sell the house and pay off the loan I have, and then I can go get another VA loan.

Yeah.

so I can keep using the VA loan. basically forever.

That's fantastic.

So. And another good thing to talk about, the funding fee is if you have. And this is important because I didn't know it when I left the service. is that when you have a disability rating of 10% or more, there's no VA funding thing now. So that's we're talking 2%, 2.15% up to 3.3.

And the disability probably, you know, if you PTSD in those kind of things probably as part of that.

Two for a 10%. And you can look at your hearing loss, which for me had I thought about that, had I thought ahead minute, it's like, well, I might refi. So I don't want to pay my funding fee. maybe I should have my hearing looked at a little more closely. Yeah, because the 10% disability rating is not that.

That doesn't seem like that much. Yeah, right. I mean, yeah, if you have a some hearing loss and that's that could be 10%.

There's so many rate there's so many issues out there when you go through your final health physical and, and, and talking about that and going to a doctor and say, well, you have legitimate issues.

Yeah. Yeah. Well that's that's the last thing I want to cover is so in Whatcom and Skagit County. Yeah. what are the what are the main, you know, what are some of the bigger resources available for those? I mean, obviously with Oak Harbor Edmins Yeah. You know, you have these nearby bases, right? So, you know, I'd imagine there's there's good resources here.

Right? So kind of the big picture you have in Seattle, the regional, veteran center that has the VA hospital and, and all that, that goes with that. because we have so many veterans and bases from Kitsap to Everett to Oak Harbor, that I don't know the number that it's in the tens of thousands of veterans, on active duty, not not counting the retired.

Navy, by far the biggest thing Navy.

there's also Joint Base Lewis-McChord, which has the Army side, Air Force as well, at near Tacoma. so there's a huge active duty presence in addition to that's why a lot of retirees are in this area. So Seattle is kind of the hub. Mount Vernon has a veteran health center, and other associated benefits for counseling.

And there's a that, center in Bellingham as well that provides, counseling, PTSD and, and other things. So the resources out there.

That's great. Yeah. That's great. Well, we've covered a lot. it was really cool to hear about more about your history. And, certainly if you, if you know somebody who's, enacted military or a veteran, or your yourself, hopefully, even if you're not in the area, but you're just looking for, you know, resources or real estate questions.

you had mentioned also, it's important if you are, a veteran to go to a va.gov and there's tons of resources there too, right?

There's so many things you just don't know. Even when I was on active duty, I may have known 5% of things that are available. Yeah, and I retired. I felt relatively fine and healthy and normal right after 20 years of flying. but as my wife said it, maybe you're hearing is not as good as you think it is.

yeah. So there's things you might want to check a little further before you get separated and out of the service. And it gets a little more difficult. Yeah. So just a lot of things that I didn't know about. so. But definitely go I've, ask myself, ask other veterans, just ask around. Ask a lot of questions, say, oh, I had no idea that existed, that that program was out there.

So yeah. And hopefully they can get into, homeownership if they're not into homeownership. And with that VA loan and. Yeah, yeah. So, thank you for your service, my man. Thank you. appreciate it. thank you, thank you, thank you and thank you for listening or watching. And, I think that's it.

Thank you. Yeah. Thanks, Paul.