Home buying and/or building can be a daunting process–exciting, but daunting. From making the decision to buy, assessing your assets and your credit score, choosing a geographic location, to securing financing and finally closing the deal, well…it’s a lot.
If you served in the military or were married to someone in the military and you’ve found out you meet basic eligibility requirements to apply for a Veterans Affairs (VA) Mortgage Loan, there’s at least the potential for a seriously lighter financial burden, and that’s something. A big something. Lower closing costs and interest rates, little to no down payment required, and relief from private mortgage insurance really does add up to a handsome benefit that you just won’t find in a conventional home loan.
But don’t go looking at paint samples just yet. Meeting the basic VA Loan eligibility requirements related to your military service does not automatically guarantee your loan application will be approved. The VA wants you to reap the rewards for your military commitment, but it’s not a sure thing; it has standards for its veterans homes and their safety. To increase your chances of closing an equitable deal and getting your new home financed through a VA Loan, start by following this playbook for your first VA Loan
Clutch Play #1: Pick Your Property Carefully
A VA Home Loan can only be used for a home, meaning the property has to be residential as opposed to a commercial property you’re planning to transform. Additionally, your property needs to meet some basic, but well-defined standards—starting with “the three S’s:” it should be Safe, Sanitary, and Structurally sound—for the VA to back it financially. If your dream is an old fixer-upper, the VA Loan may not be your best bet to finance that ventur
- Things to look at:
- Look for relatively new, structurally sound houses. Anything built before 1978 has to be checked for lead paint, so if you set your filters for homes built in 1980 or more recently, you may be able to skip that step.
- Electrical and plumbing systems should function well and have some life left in them.
- Heating systems–safety and adequate heating are a must, and wood-burning stoves can’t stand alone as the heat source.
- Water and sewer systems–clean water supply and adequate waste disposal are required.
- Roofing–its condition and potential longevity will be closely inspected.
- Functional and dry crawl space should be accessible and show solid foundation structure
- Adequate grading must prevent pooling water on the lot/around the house Termites: they’re a no-no
This may seem like a long list, but actually, it’s not even the whole thing (see Ch. 12 of the Lender’s Handbook for the whole thing). What we’re saying is, if you have your heart set on the VA Loan, do your research before you start your house search. The last thing you want is to fall in love with a home/the loan only to find out that the two are not a compatible match.
Clutch Play #2: Choose an Experienced Lender
If you’ve ever purchased a home, you’re familiar with the maze, the money, the stack of paperwork and endless signatures. Yes, things are a little complicated. Home buying is kind of a big deal. But despair not. Even home buyers who have been around the block get a little stressed; what they hopefully learned the first time around, though, is that there are trustworthy, seasoned professionals that can make the experience considerably less stressful while getting the best deal around. That’s what a VA Approved mortgage lender can do for you. An approved lender with experience in VA Loans can help you navigate the eligibility requirements, the forms, the rates…all the steps. VA Loans are a horse of a different color—not necessarily any more or less complicated and a conventional home loan, but they are different. Mortgage lenders who only deal with conventional loans may attempt to steer you away from them, or worse, cost or delay your loan approval if they misstep. That’s why it’s so very important to choose an approved mortgage lender with proven experience in VA Loans. If you’re a veteran or have ever been the spouse of a veteran, you know about clutch plays, and you know about the importance of a team you can trust. Home ownership? You’ve got this. We’ve got this.