Whether you’re a first-time homebuyer or taking another walk down Homebuyer’s Lane, this guide breaks down not just the basics, but words of wisdom that will help Veterans navigate buying a home, and how they can use their VA benefit to their advantage.
1. Assemble Your VA Homebuying Team
You can build your entire home buying team around your VA benefit. Finding and bringing on a VA specialized lender with a VA savvy real-estate agent will go a long way, every time you buy. Part of buying a home with confidence means having a team in your corner. Choose a lender and get preapproved for VA financing as soon as possible before venturing out to look at homes. Finding a specialized VA lender to help you along with your like-minded real estate agent will set you up for an overall smoother experience.
With a good real estate agent, you can save time and money. As a Veteran, finding yourself an agent who’s experienced and educated with VA purchases will prove to be most helpful in your search. These agents have a unique eye for spotting listings most likely to be “VA eligible.” Save yourself the heartache of building up hope to buy a home that the VA will not guarantee. They will work alongside your lender to help find you listings, set up tours for you, and have the tough conversations when presenting and negotiating an offer for you. They are also great for insights where you’re purchasing. Additionally, these agents will also know how to write your VA contract correctly, and negotiate to your advantage
2. Get your Money in Order.Now Say it Out Loud.
Buying a home will cost you money out of pocket before you own it. This is commonly overlooked and often surprises buyers. Remember, this is your investment. Investing takes capital before commitment. Also, the mortgage industry is highly regulated. Today, mattress money and cash are NOT king. If you’re planning to buy a home, get any and all cash or gift funds deposited into the bank not sooner than 60 days before you plan to close. Lenders will not even consider these monies to have value when you apply for a loan. Cash is not a legally usable instrument in mortgage transactions. However, this does not apply if you are instead purchasing 100% cash from a private owner, with no financing.
At a minimum, when looking to buy your first home, you will end up coming out of pocket for your earnest money deposit when making an offer and the appraisal inspection. In an age where living paycheck to paycheck is real life for many, having reserves (savings) in the bank is often tricky. It is recommended that you save at least three to six months’ take-home pay to cover your mortgage and all other living expenses should you lose your primary source of income. Typically, having $1,000 or more to cover your expenses while purchasing a home will help ease the stress and not cut into your normal day to day expenses and monthly obligations. Also, whenever possible, payoff or pay down as much as existing debt as you can. The appraisal inspection is required when buying a home to ensure the price you’re paying is what the house is really worth. Additional inspections such as whole-home, radon, and roof are all optional. You will likely come out of pocket for these with one exception- VA purchases do not allow the veteran to pay for the pest inspections and must be reimbursed if they do.
3. Clarify Needs vs. Wants.
Carefully considering your wants and needs is key in the beginning. You’re not likely to get everything you want in a home unless you’re building it from the ground up (with the budget to match). This can be done with a VA approved builder and is an excellent option for your VA benefit. Avoid frustration by identifying the things you truly need from the amenities and features you want, but can live without. It’s helpful to write down your must-haves to bring along with you as a point of reference while you’re touring homes. A real estate agent will work even harder to seek out properties that meet these, as another advantage to reiterate: You need your own real estate agent!
4. Get Comfortable with VA Minimum Property Guidelines (MPR’s)
The VA Loan program was designed to help Veterans and service members buy homes that are structurally sound, safe and priced appropriately. Shopping around for “move-in ready” homes should land you a solid choice. As a veteran, you will be looking for homes that fall within the VA’s “Minimum Property Guidelines”, commonly referred to as “MPR’s.”
Homes with property condition issues are not automatically out of reach but are more likely to have items that the VA will call for to be repaired or otherwise addressed before they will clear the property for purchase and allow closing. There are also some property types — like condos and manufactured homes, for instance — that can require more time and effort to purchase using your VA Loan. VA-savvy agents can help you identify properties that look like a good fit for this powerful home lending option.
5. Tour Homes with 100% Confidence.
Grab your preapproval letter, your agent, and take plenty of time to check out each home. You’ll walk out of some without even bothering to see the upstairs, but linger in those with promise. When you’re in a home, search every nook and cranny. It isn’t impolite to open cabinets, doors, and windows or even flush the toilets — you’re evaluating what may become the most significant investment in your lifetime. If the seller is present during your tour, take notes instead of commenting. Positive and negative feedback can come back to haunt you at the negotiating table. This is better left to discuss with your real estate agent so they can help to facilitate that feedback to your advantage.
Remember that you earned an exclusive homebuying benefit with your time in service, and these are some of the advantages that set you apart. Use them as a good rule of thumb every time you venture out to buy a home. Most importantly, good luck!