5 Things Veterans Need to Know When Buying a Home
The home buying process is very challenging when you have little to no information and/or experience. Furthermore, mortgage guidelines are constantly changing and often defy common sense. There are many things you need to know to make the entire process seamless and easy. If you are a veteran looking to buy a home, this article is for you. Below are 5 things veterans need to know when buying a home.
1. Consider taking a VA loan
Veterans have an outright advantage when it comes to home ownership in the U.S. The United States military has a home ownership program that enables veterans to take out affordable home loans with no down payment. VA loans also attract many other benefits. For instance, they are guaranteed by the United States Department of Veterans Affairs (VA) which results in often lower interest rates than typical conventional home loans (because they are less risky from a lender’s perspective). VA loans also have higher limits. The Department of VA guarantees up to $424,100. Furthermore, the eligibility criteria for a VA loan is favorable to most service men. There are many other benefits of taking a VA loan if you are a veteran. For instance, a VA loan does not have monthly mortgage insurance like FHA, USDA, or conventional loans with less than a 20% down payment. Borrowers also have refinancing options. In summary, VA loans are the best types of home loans for veterans.
2. Consult a mortgage lender
Unless you are planning on buying a home using your own money, you’ll need to talk to your mortgage lender beforehand. Doing this is important for one main reason; mortgage lenders are best placed to determine your buying power. Mortgage lenders study the financial information of potential clients and give them pre-qualification and pre-approval letters which are crucial for any serious house-hunting process (when you are being financed).
3. You’ll need a real estate agent
Even though it is possible to get a VA loan and go through the entire home buying process on your own, a real estate agent will make the entire process seamless and effortless. Real estate agents have priceless knowledge and expertise on all matters real estate, so it’s crucial to find a good real estate agent to guide you. A good real estate agent will offer you home pricing expertise. They can help you determine whether a home is worth the listed price or not in a short time. They can also guide you on finding the perfect home for you, negotiate on your behalf, offer expertise and handle many of the home inspection and moving details on your behalf. Most importantly, it does not cost the buyer to have a real estate agent. The seller pays for both the listing and buying real estate agent fees.
4. You’ll need to save money for closing costs/other expenses
VA loans don’t require a down payment. However, you still need some money to handle closing costs among other expenses associated with buying a home such as; insurance, tax, moving fees, etc. For this reason, you need to save money to handle these other expenses. Additionally, veterans that have 10% or more service connected disability are exempt from the funding fee. For those veterans without 10% of more service connected disability, the funding fee can be financed into the loan, but you can pay the funding fee up front as closing. Additionally, veterans who put money down can receive a reduced funding fee as opposed to putting no money down.
5. No large purchases if you are under contract
This may be the MOST important consideration to make. Once you are looking for a home and have become pre approved, you should AVOID ALL large purchases. Not only should you avoid straining your finances, but your debts and liabilities are monitored until your loan closes. You should not open any new credit, run up any current credit cards, co-sign for a loan, buy a new car, buy new furniture or appliances, change or quit your job, have any late payments, have your credit ran for no reason, close or open any new bank accounts, transfer cash into your account, or any other activity that could compromise your financial stability
Basically, from the time you are pre-approved to the time you close, you should ruun an extremely tight ship in regard to your finances and credit and ALWAYS consult your lender before making any significant decision.
Buying a home is extremely stressful and the process can seem daunting. The easiest way to avoid unnecessary stress is to consult a local lender, who is available when you need and then understands the VA loan and mortgage process in and out. They will enable you to have a positive and enjoyable experience.
As discussed above here are some tips to help you out. First and foremost, a VA loan is the best home loan for a veteran. Secondly, you still need to consult real estate professionals like mortgage lenders and real estate agents. Also, remember to save money for closing costs among other expenses associated with buying a home. Lastly, avoid making any decisions that would negatively affect your credit or add any additional debts before your loan closes.
Are you a veteran looking to take a home loan? If yes, look no further! A VA loan is your best option.
I am a certified instructor for Military Mortgage Bootcamp. I have passion and unmatched experience on VA home loans.
Let me take you through the VA home loan process. CALL OR TEXT NOW! 804-586-5174