Buying a Home Is Easy With a VA Loan
In 2020, lenders issued 10,795 VA loans in the state of Hawaii alone. These loans are popular in all states, though, as they help veterans become homeowners.
If you recently got out of the military and want to settle down, you might be ready to buy a house. If this is the case, buying a home is simple through a VA loan.
Most people with military experience qualify for VA loans, but many people have questions about them. Here is a guide to help you learn everything you need to know about VA loans if you’re ready to buy a house.
Step One: Get a Certificate of Eligibility
One of the first things you’ll need to do to get a VA loan is to obtain a certificate of eligibility (COE). This certificate is something you must acquire through the Department of Veterans Affairs (VA).
The VA has a process you must use to request this certificate, and they will only issue them if the applicant meets the essential criteria. If you meet the criteria for a COE, they will issue you one.
You can apply here for the CEO, and this is something you should do before doing anything else. Without the CEO, you cannot get a VA loan.
You might qualify for other loan programs, but VA loans offer many benefits compared to most other loan programs. Therefore, if you have military experience, this is usually the best loan type to use.
If you have military experience and have other questions about VA loans or homes you can buy with VA loans, check here for more information.
Consider Your Current Financial Situation
The next thing to do is to consider your current financial situation. To qualify for any loan, a lender will look at three main things:
Income
First, lenders need to see that a person has income coming in each month. You need income to make your mortgage payments, and lenders look at two main things.
First, they look at your income amount. Secondly, they look at your job history.
Credit
Next, a lender will examine your credit. Your credit score tells a lender your risk level. If your score is high, the lender views you as a low-risk borrower. They view people as high-risk borrowers when they have low scores.
Finances
Finally, lenders like to evaluate a person’s finances to see where they stand. For example, they will compare your income to your debts. They might also evaluate your assets compared to your debts.
You can purchase a house with a loan if you meet the eligibility requirements for the loan program you use. The next step is learning these requirements for VA loans.
Learn the Criteria for Qualifying for a VA Loan
The VA doesn’t issue the loans to veterans. Instead, they back the loans. Backing the loans means they provide insurance to the lenders who issue them, thus reducing the risk the lenders assume.
As a result, the VA creates criteria for qualifying for VA loans, but lenders also create eligibility requirements. The first requirement is that you must have a CEO, as described above.
Lenders also have rules relating to the following things:
Credit Score
Lenders have the flexibility of setting their own credit score requirements. Most lenders require a score of at least 600, but some require higher scores. You can call around to see the differences between lenders in your area.
DTI Ratio
The DTI ratio compares your debts to your income. Lenders also have requirements with DTI ratios, but the requirements vary.
Down Payment
You might also need some money down on your purchase. You can qualify for a VA loan without money down, but it might affect the amount you must pay for the funding fee.
Additionally, when you get a VA home loan, you will pay a funding fee to the VA. The funding fee provides money to the VA to help them continue offering these government-backed loans.
Work With a Lender That Specializes in VA Loans
If you believe that you meet the eligibility requirements and are ready to buy a new home, you should start looking for a lender.
Lenders do not always offer VA loan programs, but there are plenty of lenders that do offer them. You’ll want to find one that specializes in these loans, as they’ll offer more assistance to you throughout the process.
Your lender will walk you through the application process. They will also help you learn more about the rules related to the types of homes you can buy with a VA loan.
One of the main rules is that you can only buy a house that you plan to use as your primary residence. In other words, you can’t purchase a vacation home with a VA loan.
Hire the Right Real Estate Agent
Finally, you’ll need to hire the right real estate agent to assist you with your purchase. It’s helpful to pick an agent that understands VA loans and that has experience working with military workers who want to buy homes.
Your agent can assist with every aspect of your home purchase, including the following things:
- Researching the schools in the area
- Helping you create a budget for your home purchase
- Assisting you with finding a home that offers what you want and need
Some real estate agencies specialize in military relocations. If this is what you need, you’ll benefit by hiring an agent that offers this service.
Buying a Home With a VA Loan Is a Smart Move
Buying a home is a dream that many people have, but you can turn this dream into a reality with a VA loan. If you need help knowing where to turn for a loan, contact us.
We can guide you through the loan process and help you find a home that you can purchase with a VA loan. Call us today to learn more!
