If purchasing a home is the American Dream, then there are few people more worthy of achieving it than the veterans who served to protect their country. It’s an exciting milestone in anyone’s life, but settling down with a family after being away for so long is all the more meaningful for men and women service members.
However, the process can seem a little intimidating and overwhelming. That’s why we’re here to provide you with five tips on how to buy a home as a veteran. Use these suggestions to guide your path with less stress.
1. Look at Your Current Finances
Before you start hunting for houses, assess your current financial situation including things like:
- Income and expenses
- Monthly budget
- Outstanding debt
- Credit history
Be sure that you’re ready to buy a home and determine how much you’re will to spend on a mortgage. You might decide that it’s better to wait a little while and save money in the bank to prevent yourself from falling into mortgage payments that are hard to keep up with.
2. Take Advantage of VA loans
Before you start searching for a home in the city where you want to live, you should learn about mortgage loans offered through the US Office of Veterans Affairs (VA). These loans are guaranteed by the federal government, meaning the lender is protected against loss in case you were to later fail to repay the loan. In many cases, this guarantee effectively replaces the need for a down payment and results in favorable financing terms.
If you’re not sure how to apply for your VA loan, the first step is to obtain a Certificate of Eligibility (COE) which proves that you meet the initial eligibility criteria for VA loan benefits. The COE will also inform the lender how much the federal government will guarantee on the loan.
3. Shop Around for Lenders
An experienced mortgage lender or broker should be able to help you obtain the COE and present all the financing options available to you. They can also get you acquainted with important details regarding:
- The housing market
- Lending limits
- Loan entitlement
The lender may also pre-qualify you for a specific loan amount depending on the COE and several other factors, but be sure to shop around to find someone with plenty of expertise in this specific area.
4. Hire a Real Estate Agent
You can try to find a home in a specific city that fits your search criteria and budget, but most people hire a realtor for help. Real estate agents are far more knowledgeable on how to find the best local properties given your needs and preferences. And although their service may cost more than the DIY route, they’re adept in the art of negotiation and might be able to knock money off the listed asking price, thereby saving you thousands of dollars at close.
You can ask for recommendations from family, friends, and neighbors, or search for a realtor online. Meet with several to find the one you like best, and always remember to read the fine print before signing any agreement. They should fully disclose any charges, fees, and commissions they charge, in addition to your rights in the buyer-agent relationship.
5. Look for a Home
Now comes the fun part: hunting for the home of your dreams! As noted, a realtor can significantly cut down the time it takes to find your forever-after, but either way, you’ll still need to visit and tour each property that has the specs you’re looking for.
While you’re comparing properties in various price ranges, keep in mind that the lending limit defines how much the VA is willing to guarantee to pay your lender if you default on the loan, but they do not limit how much you can borrow to finance a house.
Once you find the perfect fit, the real estate agent will submit a competitive offer that’s hopefully accepted by the seller. The realtor will also walk you through the appraisal and escrow process so you can get the keys in your hands sooner rather than later.
VA loans offer fantastic financing terms that you can (and should) take advantage of if the time is right to buy a home. Use these financial tips and real estate advice to become a first-time homeowner with minimal stress involved.