Essential Tips For Buying A Home With A VA Loan
First things first. If you are active duty military or retired military, VA loans offer some unbeatable advantages for military home buyers, like $0 down payment, no mortgage insurance, and more lenient credit underwriting. VA loans are certainly a more specialized loan product, but buying a home with this hard-earned benefit isn’t all that different from buying with other loan types. Having the right information and the right team in place can make a big difference though. And, whether this is your first home with a VA loan or your 10th, everyone can use a few expert tips to make the process as stress-free as possible. Right? Of course I’m right.
Tip No. 1 is start with the right realtor - To save yourself a lot of time (and an awful lot of heartache), look for a Realtor® who has VA experience—and the time to sit down and focus on your needs. Get to know your realtor. You want somebody that is going to take time with you. And, although buying a home isn’t necessarily more complicated for veterans, it helps to have someone in your corner who knows the ropes.
Tip No. 2 is budget time to find the right home - Buying a home takes time. This may be a luxury you might not have if you're active military and need to move fast. If you’re not active duty you probably have more time. But, be honest with your real estate agent and tell them exactly what your non-negotiables are; if you’re honest on what your wants, needs and desires are, there’s a good chance that you will find a home quickly. In some areas though, the home search can take a little or even a lot longer, especially if you’re looking in a popular price range and competing with cash buyers or conventional loan buyers. Also, if you are looking at older homes, the VA will approve older homes. However, any home you’re considering will need to be free of major problems. Many fixer-uppers won't fit that bill unless you the buyer or the seller is willing to pay for repairs in order for the loan to close. If you do find a home and get your offer accepted, don't forget to factor in time for escrow and closing. The good news is VA loans don’t take significantly longer to close than conventional financing. There are some lenders that can close VA loans in as little as 3 weeks. We can help you with that process. Most importantly, you need to get pre-approved for your mortgage loan. Pre-approval gives you a clear look at your purchasing power, and home sellers love to see proof in hand that you have the financing to close the deal.
Tip No. 3 is don’t ask for everything - Every market, home, and offer are unique, but every real estate deal shares this characteristic: a seller can only be pushed so far. Just as you would for a conventional offer, your realtor will use his or her knowledge of the market to make your VA offer competitive and attractive. But, are those cosmetic repairs you want the seller to make really necessary? Consult with your lender to determine if the seller needs to cover some of your closing costs, or if you are comfortable covering some or all of them. If the market is competitive you cannot expect that the seller will pay for closing costs or repairs that they wouldn't have to pay by accepting an offer from a buyer with a conventional loan.
Tip No. 4 is be cautious of financing requirements - It can be devastating to be denied the loan for the house of your dreams. So, to keep it from happening, you and your agent will want to pay close attention to the listing details. What does this mean? Well, if the seller has noted certain financing requirements, (such as buyer must be cash or conventional) it might be a waste of time to view the property. If the home is not in great condition financing with a VA loan may not be possible. Some listings, especially fixer-uppers, will mandate cash or conventional loans only. Not only does that mean your VA loan isn't what the seller is looking for, but it also likely means the home won't be approved for VA financing because of its condition. If there are obvious imperfections with a home VA appraisers are going to point them out. Things like severe dry rot or pest problems, insufficient heating, inadequate electrical systems, broken or cracked windows and bad roofs. Typically, listing details would exclude VA offers because the seller and listing agent know there is going to be an issue with the VA appraisal. The best school of thought is to avoid looking at homes that would fail a VA appraisal. Unless, there is evidence that the seller would take care of those items to make the deal work. While it can’t hurt to run a property with restricted financing by your realtor, don’t put too much hope into it working out. Stick to listings that have more agreeable terms. The VA has some strict, set-in-stone requirements and standards when it comes to appraising a veteran’s prospective home. Agents and sellers burned by the process often see it as punitive and arbitrary. But, these measures are in place for a good reason. The focus of the VA loan program is to ensure the health and safety of veterans and their families. The VA isn’t going to guarantee a loan on a home with major issues that could jeopardize the safety of its inhabitants. Agents who know the VA’s method and process can help veterans avoid pitfalls and potential problems long before they arise.
The VA loan process, once cumbersome and disorganized, has undergone dramatic changes in recent years. Those streamlining efforts have made VA loans simpler and easier to process than ever before. However, not everyone is aware of the VA loan’s makeover. Most importantly, you need a realtor that can write an aggressive offer teamed up with a lender who can close a VA loan in as little at 21 days. Contact us today regarding our VIP Homebuyer Strategy for VA Buyers at www.robertlewisgroup.com or text 'VA' to 916-838-8745 or email [email protected]