Buying a house with your loan benefits can be exciting, but it can also be frustrating and challenging. Underwriters and loan offices will always ask for tax returns, pay stubs, or documents that you’ve never organized beforehand. In fact, you might enjoy a sense of accomplishment when a lender accepts your offer. Despite being a veteran, buying a house doesn’t have to be a challenging moment.
You might encounter unexpected problems along the way, but that doesn’t have to make the entire process complex. Both first-time and seasoned military homebuyers who take the time to prepare themselves are aiming for the best possible experience. Below are seven tips that can help veterans get the most out of their hard-earned benefits.
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You Can Start Without the COE
Getting a copy of your VA Certificate of Eligibility isn’t needed to start the loan application process. Most lenders will only ask for this document after a few steps. You can a copy of your own COE if you’re worried about the entitlement amount or if you’re comfortable with securing proof of your benefits.
If you want to get a copy, visiting the VA’s eBenefits portal is the most standard way to do that. However, don’t let the absence of your COE hinder you from calling an approved lender to start the pre-qualification and pre-approval phases of the application process.
You Should Have a Decent Credit Score
Building a decent credit profile is essential in your ability to get a loan and the kind of terms and rates available. Before the pre-qualification process, secure a free copy of your credit report. To avoid mistakes, make sure to examine your credit profile, ranging from reporting errors about late payments to unauthorized transactions. Nearly a lot of credit reports have serious errors that will affect the loan application process.
Your VA Benefits Aren’t a One-time Offer
Your VA loan benefits are yours for life. It’s not a one-time program or is exclusively for first-time homebuyers that you can use repeatedly. In fact, you can apply for more than one VA loan at the same time. Don’t let someone hinder you from claiming your benefits because you already claimed one years ago. You can even apply for a new one after defaulting on your previous loan.
You Should Follow Your Budget
Your pre-approval amount indicates the highest amount you can afford based on your current financial situation. Looking for your new home can be exciting, making it easier to let your emotions run wild. For example, your pre-approved loan is $250,000, but that doesn’t mean you’ll need a house of the same amount. Owning your first home comes with a wide range of expenses.
It can range from property taxes to maintenance costs, homeowners’ insurance, and more. Financing options have some set conditions to help buyers avoid becoming poor, but it’s something you should think about from the start.
Make It a Habit to Shop Around
Don’t overlook comparing the costs, terms, and rates of different lenders. You don’t have to decide based on these factors, but you should remember that they’re all determining factors to consider. In fact, serious mistakes on your credit profile can cause the scope to dip, but that doesn’t happen regularly. More importantly, most loan lenders will cater to multiple inquiries from mortgage lenders within a single call or a month.
That will allow you to shop around with confidence. You don’t have to worry about your credit profile getting dragged down every inquiry from the mortgage lender.
Prepare Your Money Upfront
Veterans can buy a house without any down payment. It’s common for the sellers to settle the closing costs; however, you’ll still need money upfront for things such as the home inspection, the appraisal, and the money deposit. You can still get your money back after closing the deal.
Understand Residual Income
Your residual income is a unique requirement that’s only applicable for VA home loans. It’s the reason other loan programs have had a lower foreclosure rate in the last five years. In short, the loan program will want the buyer to set aside a minimum amount after their mortgage payments or other significant expenses.
It’s a range that will cover daily expenses like healthcare, groceries, gas, and more. Its price range differs by location and household. Before submitting your application, make it a habit to ensure that you’re meeting this rule. It’s another aspect where you might have to adjust your desired loan amount to make the numbers work for you.
Final Thoughts
For most veterans, buying a house is an emotional and tiring milestone, especially for veterans who spent their lives traveling to different bases and looking for a place they can call their home. While the homebuying process can be overwhelming, you can find many resources to make it more affordable and manageable.