What Veterans Must Know Before Buying Their First Home

As a first-time homebuyer, the process can be overwhelming and confusing. At HomePromise, our VA loan experts have prepared this article for you. If you are an active military member or veteran planning to buy a home in the next few months, this article is for you. 

HomePromise provides the information you will need to feel confident when buying your first home. We can help you with your first-time home-buying journey along with VA loan facts. We understand the VA home loan program and can guide you through the closing process. We can also explain the VA funding fee and what qualifies for an exemption.

First Time Home Buyer and VA Loans

When it comes to buying a home for the first time, veterans have an advantage in obtaining a VA loan. A VA loan is a mortgage loan offered by private lenders, such as HomePromise.

Unlike FHA loans, a VA loan is guaranteed by the Department of Veterans Affairs (VA). This means that as a veteran, you can enjoy benefits such as a no down payment requirement and lower interest rates if you qualify.

VA loans do not require private mortgage insurance (PMI). This is different from conventional loans. It’s possible for hundreds (or even thousands) of dollars to be saved through the use of your VA home loan benefit.

“Home Promise was the right choice.” – Daniel E.

Additionally, there is no prepayment penalty for paying off your VA loan early, giving you more flexibility in managing your finances.

To be eligible for a VA loan, you must first meet certain requirements. These include serving at least 90 consecutive days of active duty during wartime, or 181 days during peacetime. You will also need to obtain a Certificate of Eligibility (COE) from the VA before applying for the loan. HomePromise can help you do this quickly by calling 800-720-0250.

The VA Loan Process

It’s important to note that while there are many benefits to getting a VA loan, there are also some limitations. VA loan limits may be placed on how much you can borrow. The limits vary by county and state plus they can change every year.

The VA loan process is specifically designed to make it easier for veterans to buy their first home. First, you need to get pre-qualified for a VA loan by showing proof of your military service and income to a VA lender like HomePromise. 

To see if you qualify, HomePromise will consider your credit score, debt-to-income ratio, as well as other factors.  Also, call HomePromise 800-720-0250 as they can obtain your COE quickly and then, evaluate your borrowing capacity.

Once you find the right home that fits within your budget, it’s time to submit an offer. Your real estate agent will assist you in negotiating with the seller. They will ensure that all necessary steps are taken before proceeding with the purchase.

After your offer has been accepted, contact HomePromise to start loan processing. A VA home appraisal will take place next.The appraiser will make sure the property must meet standards set by the VA. Some of these standards protect you from buying a home with problems.

Everything must check out for you to move on to the underwriting stage with HomePromise. Here, all of your financial information will be verified once again. When underwriting is done, you will receive approval.

Next, it’s time to close. This is when you sign the necessary paperwork and transfer the funds to the settlement agent.

Now you are officially a homeowner! However, working with the VA loan experts at HomePromise can reduce some of the tension and uncertainty.

The Closing Process

Closing on a home can be an exciting milestone. However, it can be overwhelming for first-time buyers. Taking the time to understand the process can help alleviate the stress of closing.

The closing is where all the final paperwork is signed and ownership of the property is transferred to you.

HomePromise will provide you with a Closing Disclosure before the closing day so you can review costs and loan terms one more time. This document outlines all the costs involved in the loan and shows your loan amount, interest rate, loan term and projected closing date. Make sure to review this document carefully so there are no surprises on closing day.

On the day of closing, bring two forms of identification and any additional documents your lender may have requested. Your settlement agent will likely require a certified or cashier’s check for any remaining funds due at closing.  Often you may also wire funds for closing.

During the actual signing, take your time reading through each document, and don’t hesitate to ask questions if something isn’t clear. Once everything has been signed and approved, congratulations!

After signing, there may still be some post-closing tasks such as transferring utilities and correcting documents signed at closing, if any. But now you can celebrate owning your very own piece of real estate!

Things to Consider When Buying a Home for The First Time

Veterans have many benefits. There are a few things to consider when buying a home for the first time. For example, are you financially ready for homeownership?

Make sure you take the time needed to save enough money for closing costs. Consider the monthly mortgage payments and any possible repairs or maintenance costs too.

Note that closing costs may be paid by the seller or builder.  You should find out more about who pays the closing costs on VA loans.

Buying a home for the first time as a veteran or active military member can seem overwhelming at first. Taking advantage of VA loans can be a cost saving and simple experience when buying your first home.

Consider your budget when making decisions. Work with the VA loan experts at HomePromise at 800-720-0250. They understand the unique challenges facing veterans and active duty service members.

VA loans require no down payment and have competitive interest rates. This presents veterans with the ability to buy a home without spending a lot.

How To Qualify For A VA Loan With A Low Credit Score

A low credit score can make it difficult to qualify for a traditional home loan. But, you may be able to qualify for a VA mortgage loan with a bad credit history.

Veterans and active military members can take advantage of the VA Home Loan program when buying a home. This program is run by the US Department of Veterans Affairs. This program can help veterans and active service members purchase a home. It may even help those with a low credit score, poor credit, or a history of late payments.

The VA mortgage offers a great benefit. VA home loan benefits are designed to help veterans and active duty service members purchase a home with no down payment.

It also includes relaxed approval guidelines compared to other loan programs. If you qualify, you may have an easier time getting a VA home loan than a traditional home loan even when you have a lower credit score.

What are Credit Scoring Models?

Credit scores are based on a calculation or “model” of your credit history that gives a score typically from 300-850. A high score means the model considers your credit history good or excellent. A low score means the credit scoring model considers your credit fair or poor.

“I would definitely recommend HomePromise to anyone who is looking to mortgage or refinance!” – Eulis B.

Credit scoring models are based on calculations of information in your credit history.

Some lenders, such as HomePromise, look at a comprehensive overview of your finances. This helps you qualify for a VA loan, even if other lenders have denied you. This may help those with a low credit score qualify for a VA loan.

What is a Low Credit Score?

A low credit score is generally considered to be any score below 640. VA Lenders typically use this number to determine whether an individual is eligible for a VA loan. Fact is the VA has no minimum credit score requirements. This limitation is set in place by lenders.

Credit scores are used for other kinds of loans or even credit cards. It is important to pay attention to your credit score and take steps to improve it, if possible.

You should know that the VA does not provide funds for loans, the VA only guarantees VA loans. Veterans will need to find a lender that participates in the VA home loan program.

Banks and other lenders participate in the VA loan program but many of them don’t allow credit scores under 640.

Can I Improve My Credit Score?

Yes! The key is knowing what to change. With the right advice, you can definitely improve your credit score. It’s always good to consult with a VA loan expert to understand your options and the best steps to take. The VA home loan experts at HomePromise may be able to help at 800-720-0250.

Is it Hard to Qualify with a Low Credit Score?

The VA home loan program offers many advantages. Credit requirements are more relaxed, making homeownership possible for veterans with low credit scores. Other benefits include lower closing costs and no down payment options. 

A low credit score may not be a barrier for all veterans who want to purchase a home. Some veterans and active duty service members may qualify for a VA loan even with a low credit score.

Note that there are usually additional documentation requirements for a low credit score VA loan that are used to strengthen your application.

What Documents Do I Need to Qualify for a Low Credit Score VA Loan?

One of the key requirements is a detailed explanation of the circumstances surrounding any late payments on your credit report. This letter should address all types of credit problems on your credit report.

Are VA Loans Always Better Than Conventional Loans for Veterans?

Most of the time, the VA loan program is better than conventional loans. The VA home loan program offers more flexible credit requirements over traditional conventional loan programs. Even veterans with a low credit score may be able to qualify.

One of the biggest advantages of the VA home loan program is that it does not require a minimum credit score. The VA evaluates your credit history as a whole. Other important factors they consider include assets, income, debt-to-income ratio, and employment history. 

In addition to more flexible credit requirements, the VA home loan program also offers a number of other benefits, including: 

• No monthly private mortgage insurance (PMI) required
• Competitive interest rates
• The ability to roll closing costs into the loan
• No prepayment penalty
• No down payment

The VA home loan program is a great option for veterans and active service members with low credit scores. It can be used to purchase or refinance a home.

While you will still need to meet certain requirements, the program can help you achieve your dream of homeownership.

Call 800-720-0250 now to talk to one of our VA lending experts and see if you qualify.

Why is Pre-Qualifying for a VA Loan Important?

Pre-qualifying for a VA loan depends on many factors that a VA loan expert will review with you. A full pre-qualification by a VA lender looks at your credit, income, assets, and characteristics of the home you want to buy. For example, VA lenders have to review your income to be sure it is stable and reliable.

VA applicants must also meet certain occupancy requirements. In other words, the home you are buying or refinancing with a VA loan must be your primary residence. 

The house you want to buy or refinance must meet VA minimum property standards. This will be checked by a VA appraiser during an inspection. 

The VA appraiser will look for the following kinds of defective conditions:

• Defective construction
• Poor workmanship
• Evidence of continuing settlement
• Excessive dampness
• Leakage
• Decay
• Termites

There are other potential problem areas of a home that the appraiser must note on the appraisal report. But, the best way to get a full review of any problems with a home is through a home inspection.

You also need to provide proof of military service in order to be eligible for your VA home loan benefits. You are eligible for a Certificate of Eligibility (COE) if you have served in the military for the required amount of time. This certificate proves that you can apply for a VA loan.

Call a HomePromise VA loan expert at 800-720-0250 and we will get your COE quickly through the VA lender portal.

Veterans may qualify for a HomePromise VA loan. With an expert’s help, a bit of work, and determination, you can achieve your dream of homeownership.

How To Get Pre-Qualified for a VA Loan with HomePromise?

Pre-qualifying for a VA loan with HomePromise requires some basic steps. 

First, you should gather all the necessary asset documents and paperwork needed to apply for the loan. Assets statements include bank statements and retirement account statements. 

Next, you should get together proof of employment, including two years of tax returns and W-2 forms. If you’re self-employed you should also find the last two years of your business tax returns. If you receive Social Security or pension income you should gather your most recent pension statement and annual Social Security statement.

Once you have this information ready, it’s time to call 800-720-0250 and speak to a VA Home Loan Expert.

Who Pays VA Closing Costs on A VA Mortgage?

The VA home loan program benefits active military members, veterans, and surviving spouses. Some of these benefits include no down payment and lower interest rates. However, just like any other loan, there are closing costs and a VA funding fee involved.

Closing Costs And VA Loans

When it comes to VA loans, the answer to who pays the closing costs can vary. Generally, both the buyer and seller can negotiate who pays before the closing date. However, with a VA loan, there are certain fees that cannot be charged to the veteran borrower.

The seller is allowed to pay up to 4% of the total home value in concessions toward closing costs. These concessions can cover things like title fees or prepaid taxes and insurance. If these concessions exceed 4%, then any excess must be returned to the seller.

Be aware that the borrower may need to pay appraisal and inspection costs.

Understanding who pays for what during the VA loan closing process is essential when planning your VA home-buying budget. Be sure to discuss this topic thoroughly with your lender and real estate agent before finalizing any transactions!

“HomePromise went above and beyond to answer questions and help us.” – Sandy C.

What Lenders Can Charge for VA Loan Closing Costs?

One important aspect of obtaining a VA loan is understanding the closing costs associated with it. Closing costs are expenses that occur when buying or refinancing a home. They vary based on location, property type, and lender’s fees.

Generally speaking, closing costs for a VA loan range from 2% to 5% of the home’s total cost. This means that if you’re purchasing a $250,000 home, your closing costs could be anywhere from $5,000 to $12,500.

Closing costs for VA loans typically include:

• Appraisal fees
• Title insurance premiums
• Recording fees for deeds and mortgages
• Credit report charges
• Origination fees charged by lenders

It’s worth noting that sellers can also contribute towards some or all of these costs through what is called “seller concessions.” However, seller contributions have limits set by law – they cannot exceed more than 4% of the purchase price.

While it may seem like an extra expense at first glance, closing costs are necessary to complete any real estate transaction. This will help you prepare financially for closing on your new home with a VA loan.

VA loans offer numerous benefits to eligible veterans, surviving spouses, and active-duty service members. One of the advantages is that the borrower can save money on closing costs. 

It is true that someone must pay the fees associated with a VA loan. However, the borrower does not have to pay for them alone. Sellers or lenders can contribute to the fees.

It’s important to understand what goes into closing costs and how they differ from regular loans. Working with an experienced VA lender, like HomePromise, helps borrowers gain clarity on the loan terms. Such lenders specialize in VA loans and can provide insight into what borrowers are agreeing to.

VA loans have helped millions of military families achieve homeownership over the years. Veterans choose this financing option due to its low-interest rates, no need for mortgage insurance, and flexible credit requirements. It’s easy to understand why this option is so popular.

Closing Cost FAQs

Q. What are the common closing costs that a veteran might expect to pay when taking out a VA mortgage loan?

A. Closing costs for a veteran taking out a VA mortgage can include appraisal fees, loan origination fees, title search, and insurance fees, surveys and recording fees, attorney or settlement fees, and other miscellaneous charges. Many lenders charge a 1% origination fee which would be $4,000 on a $400,000 mortgage amount.  HomePromise has a very low origination fee of only $590.

Q. Are there any fees or charges unique to VA loans that veterans should be aware of during the closing process?

A. Veterans should be aware of one unique charge associated with VA loans. These are the VA funding fees.  The VA funding fee is charged by the US Department of Veterans Affairs to provide their loan guaranty.

Q. How can veterans minimize their out-of-pocket expenses when it comes to closing costs for a VA mortgage loan?

A. Veterans can use several strategies to minimize out-of-pocket expenses for closing costs for their VA mortgage loan. The US Department of Veterans Affairs offers certain waivers and discounts to veterans when it comes to obtaining a home loan. These include no monthly private mortgage insurance, which could save you thousands over the lifetime of the loan. Also, veterans qualify for various discounted rates on services or fees which may be associated with acquiring a VA loan. But, the biggest fee to watch for is the Origination Fee which varies by lender.  Many lenders charge an Origination Fee of 1% of the loan amount.  On a $500,000 loan that would be $5,000.  HomePromise has a very low origination fee of only $590.

How Do VA Home Loans Work?

Are you a veteran or current member of the military looking to buy a home? Are you eligible for a VA Home Loan benefit? The VA loan experts at HomePromise can explain the VA loan program. This type of loan can help you buy a home (primary residence), and improve or use the equity in your home for various purposes.

Qualifying For Your VA Loan Benefits

Qualifying for a VA mortgage requires certain military service requirements and demonstrating financial stability. To be eligible, you must be an active duty service member, veteran, or surviving spouse of a deceased service member. For a surviving spouse to qualify, the deceased service member must have died in the line of duty.

Also, you must have served at least 90 consecutive days during wartime or 181 consecutive days during peacetime.

You must obtain a Certificate of Eligibility (COE). This COE is issued by the Department of Veterans Affairs. Your COE proves that you meet all the required criteria. You can apply to get this document from HomePromise by calling our VA home loan experts at 800-720-0250.

Another important factor that affects your eligibility is your credit score and income. VA loans do not have a minimum credit score requirement. However, lenders may have their own minimum credit scores which may be 640 or higher.

“HomePromise was extremely efficient and helpful with the loan process.” – Sean M.

If you have a low credit score then HomePromise may be able to help. HomePromise has helped many veterans get their VA loans with credit scores as low as 580.

Finally, in order to qualify for a VA home loan, you must show proof of stable income. You must submit your employment history which will be verified. This includes providing W2 forms or tax returns from previous years to verify your income.

Is It Hard To Apply for a VA Home Loan?

VA home loans are an excellent option for military personnel and veterans who want to buy a house. These loans have many benefits, including no down payment requirement, competitive interest rates, and flexible credit requirements.

Applying for a VA home loan is not as complicated as many think. In fact, the process is designed to be straightforward and easy to follow, with clear guidelines like the requirements mentioned above.

To apply for a VA home loan, you will need to complete an application which can be done over the phone by calling HomePromise at 800-720-0250. You’ll need to provide documentation that verifies your eligibility based on your military service. You must also provide information about your income, credit history, assets, and debts.

While there are specific requirements involved in applying for a VA home loan; it’s generally not considered difficult. Working with experienced lenders, like HomePromise, who specialize in VA loans can help make the process easier.

What Are VA Home Loan Closing Costs?

As with all mortgages, VA home loans will have closing costs. These costs can include appraisal fees, title insurance, origination fees, recording fees, transfer taxes, and prepaid items. Examples of prepaid items are real estate taxes and homeowners insurance.

The total of these fees and prepaid typically ranges from 2% to 5% of the purchase price, depending on the interest rate you choose and your state or local government charges.

It’s essential to understand these costs before applying for a mortgage so that you can budget accordingly. HomePromise will give you an estimate of all closing costs related to your loan when you apply and also at least three days before closing. This will give you the opportunity to review the costs and be prepared for the closing date.

How Do VA Home Loans Differ From Conventional Loans?

VA home loans differ from conventional loans in several significant ways. One of the biggest differences is that VA home loans are backed by the government, while conventional loans are not. This means that lenders have less risk when offering VA home loans, allowing them to offer more favorable terms.

VA home loans usually do not require a down payment. In contrast, conventional mortgages typically require a down payment. This is often 20% or more of the purchase price to avoid a monthly mortgage.

To give you a sense of a home big as 20% can be, a $300,000 home with a 20% down payment would be $60,000. This can be a huge barrier to homeownership for many veterans and active duty service members.

One other thing to know is that regardless of your down payment, there are no monthly mortgage insurance requirements (often called “Private Mortgage Insurance” or “PMI”) for VA home loan borrowers.

In terms of credit requirements, VA home loan applicants can have lower credit scores compared to conventional loan applicants. Lenders must consider other factors when evaluating an applicant’s credit eligibility for a VA loan. These factors include reviewing past bankruptcies and foreclosures.

The rules for bankruptcies and foreclosures for VA loans are complicated. But, the good news is that under the VA home loan program, you can qualify faster after bankruptcy or foreclosure compared to conventional loan programs.

There is another great benefit of VA loans that is unavailable for conventional mortgages.  It is the VA IRRRL program.  Using the VA IRRRL program, you may be able to refinance your existing mortgage using a streamlined process with no appraisal or income verification required.

It is important for veterans and active-duty military personnel to understand the differences between VA home loans and traditional mortgages. This will help you make informed decisions about homeownership.

For most veterans, the VA home loan program is the best option. But, your individual circumstances may be unique. Call and get guidance from a HomePromise VA home loan expert at 800-720-0250. Depending on individual circumstances, both types of mortgages may be suitable options.

Types of VA Home Loans Available

The VA home purchase loan is the most common type of VA loan for veterans and active-duty service members. It requires little or no down payment and often allows the seller to pay all of your closing costs.

Another type of VA home loan is the Interest Rate Reduction Refinance Loan (IRRRL) mentioned above. This loan helps veterans lower their interest rates at a lower cost than VA home purchase VA loans. This program is available only if you already have an existing VA loan.

The VA Cash-Out Refinance Loan is another option for VA homeowners. You can use this loan type even if you don’t have a VA home loan right now. It enables you to access your home equity for many purposes including paying off debt, making home improvements, or covering unexpected costs.

VA loans are very flexible and accommodating for those who have served our country. Call 800-720-0250 to talk with a VA home loan expert at HomePromise to understand all the available options.

Can You Buy an Investment Property with a VA Loan?

While you may not purchase an investment property with a VA loan, you can purchase a multi-unit property that could generate rental income to help pay some of all your monthly mortgage payments. By “multi-unit” we mean 2, 3, or 4-unit properties.

There are 3 main conditions that must be met in order to accomplish this.

 1) The veteran must occupy one of the units as their primary residence. 

This means that if you’re planning on buying a fourplex, triplex or duplex using your VA loan, you will have to live in one of the units for at least 12 months after closing.

2)  Existing rental income from additional units may be used to qualify for the mortgage. 

This means that in certain circumstances, income from existing leases on the home you are buying can be used as income.  Some VA lenders won’t allow this kind of income, but HomePromise does.

3) Limit on how many units can be financed through a VA loan. 

You cannot use a VA loan to purchase a home with more than four units.

In summary, it’s possible to buy a multi-unit property with a VA loan as long as certain conditions are met. The key is to plan carefully and work with an experienced lender, like HomePromise, who understands these requirements well.  When buying a multi-unit property you can use your VA home loan benefits to invest in real estate and help secure your financial future!

Summary and Conclusion

A VA home loan is a mortgage option for eligible veterans, active-duty service members, and surviving spouses. This loan is backed by the VA. No down payment or private mortgage insurance is required. The process begins with the borrower obtaining a Certificate of Eligibility from the VA to prove their eligibility for the program.

This program has a special feature. Borrowers can finance the entire value of their home without needing to make a down payment. This eliminates one significant barrier many people face when buying a house – saving enough money for a down payment.

VA loans typically have lower interest rates than conventional mortgages. This is because they are backed by the government. Additionally, there are no prepayment penalties on these loans, so borrowers can pay off their debt early without incurring any fees or penalties.

VA home loans are an excellent option for many veterans and active-duty service members. They provide low-interest rates and eliminate the need for expensive monthly mortgage insurance and large down payments. Purchasing or refinancing a home is made much more accessible using the VA home loan program.  Call a VA loan expert at HomePromise to see if you qualify 800-720-0250.

VA Certificate of Eligibility Letter

Are you a veteran or an active-duty service member looking to buy a home? If so, then you may need to obtain a VA Certificate of Eligibility letter (often called a “COE”). This document is crucial for accessing the benefits offered by the Department of Veterans Affairs (VA).

However, many people are unsure about what this letter is and how to get it. Today’s blog post will answer questions and provide tips on what to do with a VA Certificate of Eligibility letter. We will also explain what actions to take once you have the letter in hand.

What is a VA Certificate of Eligibility Letter?

A VA Certificate of Eligibility letter is a document. It verifies a veteran’s eligibility for benefits from the Department of Veterans Affairs. These benefits are provided by the VA. This letter confirms that you have fulfilled the criteria for receiving VA benefits.

To obtain a VA Certificate of Eligibility letter, you must first meet specific criteria set by the VA. These requirements include serving in active duty, being an honorably discharged veteran, or qualifying as a surviving spouse of a veteran.

Some veterans think a Certificate of Eligibility is a one-time benefit that can’t be used again.  This is not true – your VA home loan benefits are lifetime benefits that you can use over and over.  In fact, you can actually use your home loan benefits on more than one home at the same time.

“HomePromise was willing to work with me when I didn’t have any luck with several other lenders.” – Victor M.

How to Get a VA Certificate of Eligibility Letter

To obtain a VA Certificate of Eligibility letter, you must first determine your eligibility for this benefit. You may also contact a VA-approved lender, like HomePromise for guidance regarding your eligibility. Their VA loan experts know the requirements for eligibility and can help you through the process.

A fast way to get a Certificate of Eligibility letter is through the VA loan experts at HomePromise.  You can call to speak with them today at 800-720-0250.  HomePromise provides your Certificate of Eligibility at no cost to you.

Having this document can simplify the home-buying process as a veteran or active duty service member. It can provide peace of mind, knowing you are eligible for VA home loan benefits.

What to Do With a VA Certificate of Eligibility Letter

Once you receive your VA Certificate of Eligibility letter, it is important to understand its value. This document means you can access your VA home loan benefits including a no-money down mortgage to buy a home.  Some other benefits of VA home loans are competitive interest rates, no monthly mortgage insurance, and easier credit guidelines than conventional loans.

It is important to know that the Certificate of Eligibility does not mean you are automatically eligible to buy a home.  You still need to qualify for a mortgage and meet VA guidelines.  For expert guidance please call HomePromise at 800-720-0250.

HomePromise will review your income, credit, debt, and assets to determine if you’re ready to buy a home. The HomePromise VA loan experts will tell you if you can begin the process of searching for a home and tell you the maximum you qualify for.

Conclusion

A VA Certificate of Eligibility Letter is essential for veterans. It enables them to access the benefits provided by the Department of Veterans Affairs. This letter serves as proof that you meet the eligibility requirements for VA loans and other benefits.

To get your Certificate of Eligibility, make sure you have all of the necessary information and documentation ready. You can request your Certificate of Eligibility by calling HomePromise at 800-720-0250 today.