Purchasing a home is complex, and even more so for military
service members, where the uniqueness of a military career extends to the home
buying process. As you navigate this experience, here are a few tips to keep in
VA Loans Are Trickier Than You Think
A consistent piece of advice you’ll hear as you begin this process is to familiarize yourself with the Veteran Affairs Home Loans. These loans, available to military service members to help with the expenses of homebuying, are a huge benefit you should definitely consider.
Why are they so helpful? Part of the loan is guaranteed by the
U.S. Department of Veteran Affairs, meaning lenders are able to provide more
favorable loans. Purchase Loans, Streamline Refinance Loans, Adapted Housing
Grants – these and more are available to military members based on various
eligibility requirements. Length of service and duty status are some of the factors
VA Loans Aren’t the Only Option
Just because VA loans are available to you doesn’t mean you
shouldn’t do your research. Service length, ability to make a down payment, how
long you plan to live in the home – all of these can play a factor into your
loan decision. While VA loans are only available to service members, that
doesn’t mean they’re the only loan available to you. By putting in a bit of legwork,
you’re setting you and your family up for success.
VA Loans Don’t Necessarily Cover Everything
One thing you’ll likely learn about in your research is that VA loans can offer 100 percent financing, meaning you’re not required to pay a down payment. Additionally, you often aren’t required to purchase private mortgage insurance, or PMI, which is required for down payments of less than 10 percent.
That being said, this doesn’t mean there aren’t any associated fees. Closing costs are not factored into the loan, and on average are between 2 and 5 percent of the overall purchase price of the home. There is also the VA Funding Fee, a sort of “pay it forward” system to ensure VA home loans will continue to be an option for future service members. This is a set fee, somewhere between 1.5 and 3.3 percent of the loan, paid upfront or rolled into the overall loan.
Temper Your Expectations
Something all homebuyers struggle with regardless of profession is
understanding that purchasing a home is a multi-year commitment. While families
don’t necessarily need to stay in one home for their entire lives, purchasing a
home is typically not a responsibility you can shirk in a few months. Plan for
the long term, and be realistic about your situation.
Are you still active duty, and have a high chance of being
relocated? This might not be the best time. Are you coming to the end of your
career, and plan to retire in the same area you’ve been stationed for the last
few years? Sounds like you’re in the best possible position to know the local
market and make an informed decision. No matter your situation, being realistic
about the time and commitment that comes with being a homeowner will make
things easier down the line.
Finally, don’t hesitate to ask questions throughout the process!
Reach out to people who are familiar with how the VA home loans work, including
other service members who have gone through the process. Encourage other
immediate family members to be involved in the process, as their perspectives
will help you see any issues with your plans. The home-buying process requires
a lot of attention and energy, but with the help of others and by familiarizing
yourself with the unique benefits available for service members, your dream
home is within reach.
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