When it comes to buying a house, military veterans have been given the opportunity to make this purchase easily. For the majority of them, Veterans Affairs (VA) loans are the best lending programs that offer flexibility, straightforward eligibility and no down payment.
We all agree that their service to our nation is highly worthy of a reward. VA loans offer a lot of advantages such as they are re-usable, they can be spent on move-in ready homes, there’s no pre-payment penalty and they are even granted if you have had a history of bankruptcy.
So, now that you know what’s in store for you when you apply for a VA loan, let’s have a look at some of the home buying strategies that will help you get this process moving along:
Step #1: Get Your Certificate of Eligibility (COE)
The first order of business is to find out whether you are eligible for a VA loan or not. You can find the eligibility criteria on the website U.S. Department of Veteran Affairs. A few other things that are required for a VA loan is sufficient income, satisfactory credit and the COE. Once you have a verified COE, you can proceed to the next step:
Step #2: Find a Lender
Not every lender offers a VA loan. You need to find lenders in your area that offer programs for Veterans and contact them. If you don’t have any connections, then it is better to hire a real estate agent. The agent will help you in preparing the right documents and then will get you in touch with a lender who will give you the pre-qualification letter, so that you can start looking at houses.
Step #3: Finding a Home
When you start looking at homes, it’s your real estate agent’s responsibility to find you one that is within your budget. Before signing the contract, make sure it has the “VA Option Clause”, which allows you to back out of the deal without any penalty, if the VA appraisal exceeds the amount of money you agreed upon with the lender.
Step #4: Applying for the VA Loan
Once you have signed the contract, you now need to apply for the loan by collecting your bank statements, pay stubs and other papers that prove you have a steady income. The lender then looks at your credit score and offers his own choice of interest rates. Since VA loans have been created for a military veteran’s benefit, they usually have low interest rates and are even approved on low credit scores.
Step #5: Loan Processing
Now that the lender has all the information, he or she begins the process by ordering the appraisal and checking the income information you have provided. A VA appraisal is not like a home inspection. It’s about finding the value of the house on the market, on the day when it was inspected. The appraisal is then reviewed and the lender determines if they will be able to grant you the loan.
Step #6: Closing
Once the appraisal is in and the lender has given the “clear to close” to the title company, you will receive a closing disclosure. This document must be delivered and signed by you, the purchaser, no later than 3 days before your close date. This disclosure sets forth your amount needed of “cash to close”. The title company will help you with the wiring instructions so that you can be confident after you have signed all the documents, the loan should fund and you will finally be the new happy owners.
You now have the keys and you are ready to start the fun process of moving in. If you have any money left over, you can finally start buying furniture and accessories to give the house a personal touch and really make it your own!!