Military Banking Rates

Tips for Veteran First Time Home Buyers

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Posted in Articles, Mortgage Rates

va home loanIt’s the American dream: House, kids, dog, Chevrolet in the driveway. Sit on your property a few years, flip it for a profit and move up the real-estate ladder. Unfortunately, the days of flipping your house for profit are long since over. Things change.

Many Americans find themselves enveloped by debt and plagued by limited capital. Foreclosures are on the rise and home sales have stagnated. The proverbial “bubble” has burst, ladies and gentlemen.

It’s not unusual to hear of homes selling for half their original going price. Today’s market is a boon for buyers and a boondoggle for sellers, but thanks to the Veterans Administration, almost any service-member or veteran has ability to purchase a house through special military mortgages. However, before you hand over a large stack of greenbacks, it’s a smart idea to halt in place and analyze the situation at hand.

Important Questions Before Buying

Before buying a home you should appraise your living situation. Are you an active duty service-member? Are deployments inevitable? If so, buying a house might not be your best option. Rather than risk owning a home in a part of the country where your access will be limited at best, one should consider renting.

Be honest with yourself–are you tired of mowing lawns? Do you pine for big city life or are you quite content living in a rural setting? For the urbanites out there, a condominium might be your optimum choice.

Buying a house or condo is monumental decision, so be sure your long-term lifestyle goals coincide with the long-term commitment.

Benefits of VA Home Loans

The Veterans Administration offers what is perhaps the most dynamic option on the market today. With nearly 20 million service-members and veterans utilizing VA Home Loans since their inception in 1944, it’s a safe bet it can help you, too.

The VA pledges to repay a quarter of every loan it guarantees in the unfortunate event the borrower defaults. Because of this, VA-approved lenders are able to offer highly competitive rates and terms for qualified military members.

Nevertheless, the most significant benefit of opting for a VA Home Loan is the borrowers ability to purchase a home with no money down. This assistance assures any qualified service-member or veteran the direct route to home-ownership. With no private mortgage insurance (PMI) required, a VA Home Loan helps with keeping personal finances manageable.

Other benefits include:

  • Competitive mortgage rates that are regularly lower than conventional rates
  • Higher allowable debt-to-income ratios
  • No prepayment penalties
  • The option for sellers to pay up to six percent of closing costs
  • Well-established refinancing loans require no additional underwriting

Eligibility Requirements for a VA Home Loan

With active-duty military personnel and veterans numbering in the millions, it can come as a surprise that the majority of these men and women are eligible for the VA Loan Guaranty Program.

Qualifications include: Service-members who’ve served 181 days on active duty or three months of wartime service; individuals who’ve spent at least a half-dozen years in the Reserves or National Guard; and spouses of those killed in the line of duty.

In order to take advantage of these benefits, veterans and active-duty members must obtain a Certificate of Eligibility from the Veterans Administration. Certificates can be downloaded online or provided by VA-approved lenders.

Move-in Fund

Aside from the initial investment required for purchasing a home, you’ll need additional funds to cover closing costs. Before the actual deal is sealed, it’s a smart bet to calculate the little things that go into owning a home. These seemingly minor costs can frequently require a large amount of capital.

For instance, when buying a condo, you’ll need to calculate the cost of maintenance and beautification, sometimes ranging in the hundreds of dollars. Conversely, private home ownership will require a paid gardener or the purchase of a lawnmower and/or other landscaping tools. And don’t forget the furniture and appliances–a major investment for many.

Don’t Rush In

An attractive price in today’s market is no reason to rush into a major investment like home ownership. Understand your finances and take time to consider the aforementioned tips and strike when the time is right for you.

Rather than jumping into the real-estate market haphazardly, focus on building your credit. Online companies like Equifax and Experian can provide you with detailed information regarding your credit score. Utilize these resources–they’ll make a world of difference when you finally decide to purchase your first home.