VA Loans are great options offered to our Military Men and Women in providing them with affordable ways to purchase a home.
Below is a list of 6 common mistakes made in the VA Mortgage process and helpful resources from realtor and mortgage experts.
Worrying About PMI
With conventional mortgages, if applicants can not put down 20 percent on a home, the lender will require the buyer to pay private mortgage insurance. As mentioned above, a down payment is not needed for VA Mortgages. These mortgages also require no PMI insurance, this is an excellent perk and one that can make a big difference in how much a mortgage payment will be!
More on PMI – Understanding Mortgage Insurance; A Guide for Home Buyers
Not Using A Bank With An Experienced VA Mortgage Rep
VA Mortgages are unique and finding a lender that is experienced in VA Loans is crucial. These loans are different in many ways from conventional loans and therefore need to be treated as so. Realtors that work often with military families are good resources for VA Lenders as well as fellow military members that may have used certain lenders in the past.
Anita Clark, Ga Realtor, wrote this article with 3 tips to select a mortgage lender.
Assuming 100% Financing Means No Money Up Front
One of the best parts about a VA Mortgage is that it requires no down payment. However, a VA home buyer may need to pay some sort of down payment when you sign the contract with the home offer. Generally when a home buyer puts money down on a house, it signifies that they are truly serious about the home purchase and have the funds to do so. This money of course will come back to the buyer in the end which they can use towards closing costs.
Janis Borgueta, Hudson Valley Real Estate, provides this article on understanding VA mortgage financing.
Choosing a Realtor Who Does Not Specialize in Military Moves
Finding an experienced realtor should be on a home buyers list of the most important things to do as they begin their home search. For military members, finding a realtor that is experienced in military moves is even more important. This type of realtor will know all the ins and outs of what military moves entail and how it effects their customers. They should also have some knowledge about VA financing and have a good background working with other military members.
Kyle Hisock, Rochester NY Realtor, shares his advice on how to interview a buyer’s agent.
Letting Bad Credit Linger
Whether you are an average home buyer, military member or veteran, good credit is always important to have. While the VA Mortgages don’t have a specific minimum credit score needed to be approved, buyers still need to be on top of their financial health. Credit history is still looked at by the lender and if bankruptcy or foreclosures have happened, that will affect the application and timing.
Luke Skar, Inlanta Mortgage-Madison, provides these credit and income requirements for a VA mortgage.
Not Exploring Other Options
VA Loans have a good deal of benefits for a home buyer but they may not always be the right fit. Doing research on the various mortgage options available, how they will affect the buyer’s situation and consulting with a realtor are good ways to keep the options open.
Bill Gasset, MA Realtor, wrote this article with mortgage options for a new homeowner.
More VA and Military Real Estate Information
- 6 Unbeatable Benefits of VA Loans – Military.com
- Veterans Guide to Homeownership – Realtor.com
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