Let’s face the facts – buying a home is a stressful experience. In fact, HousingWire reports that home shopping is one of the most anxiety-provoking life experiences out there. For veterans, this stress is exacerbated by transitioning back to civilian life or dealing with a combat-related disability.
Fortunately, veterans do qualify for several benefits when buying a home. Below, Mortgages for America breaks down the essential guide to homeownership: veterans edition.
Step 1: Get Your Finances Ready
The first step in any homeownership journey is sorting out the finances. Start by figuring out your spending power and the budget you’re willing to extend. Don’t forget to consider all the upfront costs that come with buying a house (and there’s a lot of them) – agent commissions, title fees, insurance premiums, taxes, origination fees… and the list goes on. The VA loans available to you will help bring some of these costs down, but it will be prudent to estimate for a little more than you’ll need.
Step 2: Get Loan Ready
VA loans are a great asset to your homeownership journey. Essentially, they are home loans backed by the government but issued by private lenders. This means there are looser credit requirements (but be sure to get your credit score up to speed if required) and no down payment or mortgage insurance requirements. You’ll also benefit from lower rates of interest and less stringent checks on debt-to-income ratios and other assets.
Another loan option is to take out an FHA loan. This loan offers competitive interest rates, lower down payment options, and more wiggle room regarding credit requirements. The FHA 203(k) program will benefit some veterans as it offers more incentives to take up fixer-upper properties.
VA offers a couple more loan options too, so be sure to do your research before landing on one.
Step 3: Get Shopping
Now it’s time for the fun stuff – looking for your dream home. Military families have a significant leg up when it comes to homeownership – and homeownership offers excellent benefits to veterans too. A fixed-rate mortgage means you’ll have payment stability, and you can build your credit while your property builds equity. You also accrue significant tax advantages through homeownership. These reasons make it extremely compelling to get into the buyers’ market sooner rather than later.
When you’re looking for the right property, be sure to look up different neighborhoods and price points to find the sweet spot for you and your family. Creating a list of your essentials is also helpful in zoning in on the right property. Simply write down your non-negotiables, and don’t even entertain showings in homes you’re missing a non-negotiable. This should help you find the right property for your needs more quickly.
Step 4: Get Closing
It’s time to seal the deal! According to CNBC, property rates are highest in the summer months of June and July. Thus, you’re better off working your timeline, so you’re closing around January and February (or spring at the very latest) to get the best rate.
Deals fall through all the time in real estate. Using an escrow account will be prudent here, as it will protect the interests of all parties involved and ensure that there is no transfer of funds or property until all the T&C’s are crossed. If you find that the home is missing any promised repairs or updates, you’ll be able to halt the closing process until resolution.
If you’re a veteran looking to buy a home, it can be challenging to know where to start. Besides, buying a home is one of the most significant life decisions out there. Be sure to use all the resources and benefits available to you as a veteran to help make the process smoother. Happy homeownership!
Mortgages for America is dedicated to offering programs that benefit Americans. Be sure to check out our Homes for Heroes program that offers significant discounts and loans to all prospective veteran homeowners today!