For most people, buying a home is a life-changing experience. It’s that next life step that creates permanence by putting down roots, becoming part of a community.
For many veterans who’ve spent years traveling between bases, finding a place to call home is especially sweet.
But there’s a lot to know! So, we’ve rounded up 5 veteran home buying tips that are a must-know to get you started.
For many veterans who’ve spent years traveling between bases, finding a place to call home is especially sweet.
But there’s a lot to know! So, we’ve rounded up 5 veteran home buying tips that are a must-know to get you started.
Veteran Home Buying Tip 1: Your Credit
Before you do anything else, evaluate your credit standing. Yes, VA loans have looser credit requirements than for a traditional mortgage. However, that doesn’t mean you can take your credit lightly.
Your credit score is as valuable as gold! It’s your currency to an excellent interest rate and terms. Or it can be the reason you’re seen as a credit risk, costing you a higher interest rate and less attractive terms.
Check your credit score and if it needs cleaning up, do it before you start your home buying journey.
You can also check out our post here on how the financial world views your credit history, and what to do if you need to clean up your credit.
Your credit score is as valuable as gold! It’s your currency to an excellent interest rate and terms. Or it can be the reason you’re seen as a credit risk, costing you a higher interest rate and less attractive terms.
Check your credit score and if it needs cleaning up, do it before you start your home buying journey.
You can also check out our post here on how the financial world views your credit history, and what to do if you need to clean up your credit.
Veteran Home Buying Tip 2: Understand the VA Home Loan
If you’re a veteran looking to buy a home with no down payment and limited closing costs, then you’ll want to get familiar with VA home loans.
This loan is provided by private lenders but is backed by the Department of Veterans Affairs. The loans are competitive and affordable.
If you’re a first-time home buyer with not enough money for a down payment, a VA loan may be the way to go. While VA loans don’t require private mortgage insurance, or PMI, which is a type of insurance for those who can’t afford 20% down payment, there are funding fees.
This fee is not included with a traditional mortgage. It's specific to the VA mortgage loan program, going directly to the Department of Veterans Affairs to pay for the VA program.
Understanding the basics of a VA home loan and how to use your military benefits is a good start. But to really understand how to maximize the use of your benefits, talk with a qualified mortgage lender who understands the VA mortgage loan program.
Here’s a list of eight best VA loan lenders according to Money.
This loan is provided by private lenders but is backed by the Department of Veterans Affairs. The loans are competitive and affordable.
If you’re a first-time home buyer with not enough money for a down payment, a VA loan may be the way to go. While VA loans don’t require private mortgage insurance, or PMI, which is a type of insurance for those who can’t afford 20% down payment, there are funding fees.
This fee is not included with a traditional mortgage. It's specific to the VA mortgage loan program, going directly to the Department of Veterans Affairs to pay for the VA program.
Understanding the basics of a VA home loan and how to use your military benefits is a good start. But to really understand how to maximize the use of your benefits, talk with a qualified mortgage lender who understands the VA mortgage loan program.
Here’s a list of eight best VA loan lenders according to Money.
While a VA loan may be a good fit, it pays to be an informed buyer. Explore all your lending options!
Here are four more to consider.
USDA loans--For those buying a home in a non-urban area of the US. If you qualify as low to moderate income and you don’t qualify for a VA loan, this may be the way to go. Additionally, with this program, you may also qualify for USDAs 0% down loan. Get more information on USDA loans here.
Native American Direct Loans--Specifically for qualifying Native American service members to use for housing on federal trust lands. Unlike the VA loan, NADL funds don’t involve a third party. The funds come straight from the government. Get more information on NADLs here.
FHA Loans--Similar to a VA loan, FHA does not require great credit or a large down payment. This loan is geared to the first-time home buyer. There are some cost-saving advantages to a FHA loan, but they can’t match the advantages of a VA loan. However, if your credit score is in the 500s, it’s likely you won’t qualify for a VA loan. In that case, the FHA loan becomes a great option. Get more information on FHA loans here.
Conventional Loans--For the general public, this is the most common type of home mortgage. Not backed by the government, credit requirements and financial standards are more limited. But if you have stable assets and excellent credit, this is a good mortgage route to take. Get more information here on conventional loans.
Veteran Home Buying Tip 4: Home Buying Grants and Programs
While you’re researching the best mortgage lending program for you, check out these resources for veterans.
State and Local Programs--What housing grants does your state offer? There are numerous local and state programs for veterans. Use the National Resource Directory for more location specific housing assistance.
Dream Makers Program--For qualified veterans and active duty service members, the Dream Makers program provides grants for a down payment and closing costs. This grant is based on a 2-to-1 match of what the buyer contributes to the home purchase.
Adapted Housing Grants--For veterans with permanent and total service-connected disabilities. Adapted Housing Grants help veterans to either purchase or build an adapted home. Money is also available to those who already own a home but want to modify it to accommodate a disability.
Here are four more to consider.
USDA loans--For those buying a home in a non-urban area of the US. If you qualify as low to moderate income and you don’t qualify for a VA loan, this may be the way to go. Additionally, with this program, you may also qualify for USDAs 0% down loan. Get more information on USDA loans here.
Native American Direct Loans--Specifically for qualifying Native American service members to use for housing on federal trust lands. Unlike the VA loan, NADL funds don’t involve a third party. The funds come straight from the government. Get more information on NADLs here.
FHA Loans--Similar to a VA loan, FHA does not require great credit or a large down payment. This loan is geared to the first-time home buyer. There are some cost-saving advantages to a FHA loan, but they can’t match the advantages of a VA loan. However, if your credit score is in the 500s, it’s likely you won’t qualify for a VA loan. In that case, the FHA loan becomes a great option. Get more information on FHA loans here.
Conventional Loans--For the general public, this is the most common type of home mortgage. Not backed by the government, credit requirements and financial standards are more limited. But if you have stable assets and excellent credit, this is a good mortgage route to take. Get more information here on conventional loans.
Veteran Home Buying Tip 4: Home Buying Grants and Programs
While you’re researching the best mortgage lending program for you, check out these resources for veterans.
State and Local Programs--What housing grants does your state offer? There are numerous local and state programs for veterans. Use the National Resource Directory for more location specific housing assistance.
Dream Makers Program--For qualified veterans and active duty service members, the Dream Makers program provides grants for a down payment and closing costs. This grant is based on a 2-to-1 match of what the buyer contributes to the home purchase.
Adapted Housing Grants--For veterans with permanent and total service-connected disabilities. Adapted Housing Grants help veterans to either purchase or build an adapted home. Money is also available to those who already own a home but want to modify it to accommodate a disability.
Veteran Home Buying Tip 5: Remain Employed
In the financial world, getting a mortgage loan is all about stability and the ability to pay your bills on time. That’s why it’s important to keep your employment consistent.
If you quit your job—even if you have another job lined up—is a red flag for lenders. To them, it implies that your income may not be on par with the terms of the loan offer made to you.
Just stay put until the loan has closed. That means don’t change jobs even if your paperwork is signed.
The same is true for making big purchases. Don’t do it until you’re handed the keys to your new home.
If you quit your job—even if you have another job lined up—is a red flag for lenders. To them, it implies that your income may not be on par with the terms of the loan offer made to you.
Just stay put until the loan has closed. That means don’t change jobs even if your paperwork is signed.
The same is true for making big purchases. Don’t do it until you’re handed the keys to your new home.
A Word About Closing Cost
While a VA loan has limited closing costs, there are other fees you will have to pay. These can include settlement and escrow fees, credit report, recording fees, appraisal, a survey, and title insurance.
Be aware that the title insurance you are required to buy is to cover the lender in case there is a legal problem with the property. It does not cover you!
It is strongly recommended that you buy homeowner’s title insurance to cover the biggest investment of your life. It’s a one-time fee that protects you from the most common real estate legal problems for as long as you own the home.
The path to homeownership is complicated and intricate. Follow these veteran homebuying tips first to get prepared. Then use a good real estate agent to see you through.
When you’re ready to close on your new home, turn to Lilly Title & Settlement. We offer title and settlement services right here in Staunton, VA. We’ll make the process easy and effortless for you!
Be aware that the title insurance you are required to buy is to cover the lender in case there is a legal problem with the property. It does not cover you!
It is strongly recommended that you buy homeowner’s title insurance to cover the biggest investment of your life. It’s a one-time fee that protects you from the most common real estate legal problems for as long as you own the home.
The path to homeownership is complicated and intricate. Follow these veteran homebuying tips first to get prepared. Then use a good real estate agent to see you through.
When you’re ready to close on your new home, turn to Lilly Title & Settlement. We offer title and settlement services right here in Staunton, VA. We’ll make the process easy and effortless for you!
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