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All you need to know aboutgetting a VA mortgage.
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It's a "chicken or egg" conundrum: Should you get a real estate agent first or a lender when preparing to purchase a home?
First, I wanted to thank my friend Jessi Hall for our recent Q-and-A on how to make an offer on your dream home. She’s a great resource, and we’re planning to do some live video chats with the VA Loans Insider community soon. I’ll keep you posted.
I keep thinking about a question I should have asked Jessi but didn’t: When you’re ready to start the VA home loan process, should you first find a real agent and start looking at homes or get in touch with a lender?
There’s no right answer to this question, and I’m obviously a bit biased on the subject. Veterans can’t approach this the “wrong” way, since in the end it really doesn’t matter where you start. But I think there’s a good case to be made that starting with a lender makes a lot of sense and will probably save you time and possibly heartache.
If you begin by finding a real estate agent, one of their first questions will be: Have you been preapproved for a loan? So, you’re going to circle back to the mortgage company sooner rather than later.
Starting with a lender also means you’ve got a solid sense of whether you can actually secure a mortgage — and at what price. Loan preapproval is not a guarantee, and that’s something we’ll touch on more next week. There are always conditions the prospective borrower has to meet before a loan is fully approved. But talking with a lender and getting preapproved means you’ve got a handle on your purchasing power and what you can afford to spend.
Some veterans who start thinking they want a $350,000 home are disappointed when they learn lenders will only approve up to $250,000. They’re overjoyed when the opposite is true. Looking at homes without some clarity means you might end up wasting time looking at houses you can’t afford, or bypassing neighborhoods you’re ultimately able to explore.
There are scores of veterans out there whose first impulse is to find a real estate agent. And, again, that’s totally fine. Good agents can provide recommendations for lenders and help guide borrowers through an often confusing and always important process. What’s critical here is that potential VA buyers try to find a real estate agent who truly understands the VA home loan program.
The fact is VA loans aren’t run-of-the-mill for a vast majority of real estate agents and mortgage companies. Despite updates and changes, VA loans can still conjure a negative image or a bad taste for some agents and mortgage brokers. And, as we’ve written about before, a VA-savvy agent can make a world of difference for veterans and military families.
Odds are a VA-savvy real estate agent can help point you to a mortgage company that often serves military borrowers. The opposite is also true, in that VA lenders often have relationships with great real estate agents who understand the unique needs of veterans and active military members. We actually have a national network of military-friendly agents (Veterans United Realty) who fit this description.
So, in the end, it’s mostly a matter of personal preference. No matter where you start the journey, the key is to find people and companies who truly understand this unique home loan program and when it works best — or sometimes doesn’t — for those who served our country.
We’ve talked a lot about VA home loan eligibility, the importance of good credit and how to get prequalified for a mortgage. But that’s only half the battle when it comes to getting your dream home.
There’s also that little matter of negotiating a contract with the seller. But how exactly do you do that?
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A major housing index predicts home prices will fall nearly 1 percent more before the end of 2012, with a gradual climb to follow.
Right now, though, it’s a housing market perhaps unlike any other in modern memory. The Fiserv Case-Shiller index released Tuesday shows that a conventional monthly mortgage payment accounts for just 12 percent of median family income. That’s the lowest percentage on record, which dates back to 1971.
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When it comes to VA home loan eligibility, most rules and requirements revolve around those who serve, and rightly so. The VA loan eligibility requirements can take up a good chunk of a page, and there are exceptions and unique circumstances along the way.
The only way borrowers and VA lenders can be sure about eligibility is by obtaining the veteran’s Certificate of Eligibility. As we’ve talked about before, this doesn’t need to be your first step, and obtaining the COE is something many lenders do for borrowers down the road.
But the COE becomes especially critical for military spouses left behind.
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I’ve been putting together information on VA home loans for some folks in Washington. Sometimes just spelling things out in black-and-white really makes a difference, so one of the things I tried to do was come up with some key facts and figures about this nearly 70-year-old lending program.
Awareness is incredibly important when it comes to the VA loan. A Department of Veterans Affairs survey back in 2004 found that 20 percent of veterans didn’t know this benefit existed. Social media and a sagging housing market have helped more active military members and veterans to learn about homebuying and their options over the last four years. But there’s still more to do.
A VA-backed home loan isn’t the best option for every veteran, whether it’s a purchase or a refinance. But this program is almost always worth exploring.
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