Buying A Home with a VA Loan

Dated: 05/27/2019

Views: 132

On this Memorial Day, I'd like to extend my gratitude for those who have served and have given the ultimate sacrifice for our country, A debt that can never be repaid but to honor those who have laid their lives down for us and to keep their families and friends warmly in our thoughts today.

In keeping my own tradition today in honoring all those who serve, have served, the fallen and the families, I'd like to share how I can help, as far as buying a home is concerned. Many know who and what the VA is.But did you know how they can help you buy a home? Build a home? Refinance? There are more benefits than I knew about. 

What is a VA Loan?

A purchase loan helps you to buy a home at a competitive interest rate often without a downpayment. This alone, saves you thousands out-of-pocket, up-front costs. A traditional loan requires a 20% down payment. On a $100,000 home, you've just saved $20,000!

Who Is It For?

A VA loan is not offered to everyone.  It's available to Veterns, current Service Members, and select Military Spouses. 

IF:

  • You have served 90 consecutive days of active service during wartime
  • You have served 181 days of active service during peacetime
  • You have more than 6 years of service in the National Guard or Reserves
  • You are the spouse of a service member who had died in the line of duty or as a result of a service related disability

How Do I Apply?

Most VA Home Loans are available through private lenders. The VA guaruntees a portions of the loan - if something goes awry and you can't make the payments - the lender can go to the VA to cover losses that may occur. In essence, the VA is "insuring" the loan.

ADVANTAGES

  • No down payment as long as the sales price doesn't exceed the appraised value
  • No private mortgage insurance premium requirement
  • VA limits the amount that you can be charged for closing costs
  • Closing costs may be paid by the seller
  • No penalty fees for early payoff
  • May Provides assistance if you run into difficulty making payments

Other facts to know:

  • You don't have to be a first time home buyer
  • You can reuse benefit
  • VA backed loans are assumable, as long as the person assuming qualifies

What Do I Need To Get Started?

You must meet credit requirements, have sufficient income, and a valid Certificate of Eligibility (COE) to qualify for a VA loan. The home must be for your own personal occupancy. 

What's a Certificate of Eligibilty?

The Certificate of Eligibility (COE) verifies to the lender that you are eligible for a VA loan. Each category has its own supporting documents to supply. Click Here to View More Information on the Certificate of Eligibility.

Loan Fees

As discussed earlier, a down payment is not required with VA loans, some fees may be paid by the seller, and certain fees cannot be charged to you. Some of the fees that you should be prepared for are a VA Funding Fee. 

The fee is based off of percentage of the loan amount which varies based on the type of loan and which category you are in, first-time home buyer status, and if you're choosing to make a down payment.

The fee is slightly higher for second time purchasers who don't make a down payment. National Guard and Reserve Veterans pay a slightly higher fee. 

The Funding Fee may be refundable, if you meet certain criteria, such as if you have a pending disabilty compensation claim at the time of closing and were later approved for service connected disabilty. The effective date must be retroactive to a date prior to the closing.

The lender sets the interest rate, discount points, and closing costs. These rates may vary depending on the lender.

Closing costs, the VA appraisal, credit report, state/local taxes may be paid by the seller, buyer, or shared. A real estate professional can negotiate these fees on your behalf. The seller may be able to pay some other closing costs but cannot exceed 4% of the loan. There are costs and fees that are excempt from the 4% rule.

You are not allowed to pay for a termite report.

No commissions, brokerage fees, or "buyer broker" fees may be charged to the Veteran Buyer. 

Growing up in the Army, I know what it means to have a place to call home. I've seen the sacrifice first hand and warmly thank each and every one of you for your service. 

Call 412-689-0172 to schedule your home buying appointment today!

Blog author image

Ashley Pugliesi

Serving southwestern Pennsylvania Ashley is a Pittsburgh transplant, who is ready to help with your real estate needs. With a background in banking, customer service, and supportive roles in real es....

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