With a VA loan, you can buy property from a variety of options and enjoy your golden years in your dream home.
However, like any other loan, this government-backed mortgage has various eligibility requirements. Here are ten VA loan tips to help you land your home:
Clean up your credit report
Even though VA loans do not have stringent requirements, your credit report might still determine your eligibility to secure the loan.
A higher score will undoubtedly come in handy, but any discrepancies might reduce your chances dramatically. With this in mind, it makes sense to clean up your credit report.
You can download your free credit report from annualcreditreport.com and search and report any wrongful loan accounts and erroneous late payments to the credit bureau for updating.
Avoid unemployment gaps
Staying out of work for more than two years can cost you the chance to get a VA home loan. Even though VA loans are government-insured mortgages, the lender wants to see that you can repay the loan by holding down a job.
If you have recently left the military, you should consider finding a job or advancing your education to ensure continuity and increase your chances of getting VA financing.
Ensure you get pre-approved
Being pre-approved means the lender will likely give you the loan. The pre-approval letter comes with several benefits. Firstly, it highlights your purchasing power, allowing you to only search for homes you can afford. It also shows sellers that you are a serious buyer.
While a pre-approval is music to your ears, it does not guarantee you will receive the loan. The lender might still reject your application after carrying out a deeper background check.
Follow your budget
It is always a good idea to stick to your budget no matter how much money you will receive. A VA loan of $350,000 does not mean you purchase a home of an equivalent amount. Sticking to your budget can help you pay for other expenses that come with buying a house using the remaining balance.
Residual income is vital
You already know how job gaps can be an issue during your VA loan application. Another factor that lenders consider is residual income. The Veterans Affairs department requires all members to have some money left in their accounts for everyday expenses after paying the mortgage.
The lender will calculate the difference between the residual income and the payable mortgage to determine whether the balance is adequate to handle your daily living expenses.
Engage with a credible VA agent
Whether you are in the process of securing your loan or the money is in your account, always engage a credible VA agent. Someone who understands the benefits of this program can help you save time, energy, and money.
The VA-savvy agent will guide you through the entire process, including the rules and regulations, and help you find homes that will not prove problematic during the appraisal process.
Understand the importance of appraisals
The Department of Veteran Affairs requires all beneficiaries of VA loans to move into ready homes, which must meet a minimum of property requirements.
With this in mind, independent VA appraisers have to evaluate your preferred home for defects and other issues that might contradict these requirements. If they find any problem, it might be more challenging for you to secure the loan.
Know occupancy requirements
The VA mortgage program has occupancy requirements that you must adhere to before receiving the loan. These requirements demand that beneficiaries of the loan must live in the purchased properties as their primary residences.
The objective of occupancy requirements is to prevent veteran borrowers from purchasing vacation homes or investment property.
Ensure prompt payments on your mortgage
If you have any current mortgages you are servicing, ensure that you are not late on your payments lest it becomes an issue. You can only have a minimum of one 30-day late payment with the last 12 months or one year.
You can reapply for another VA loan
You might not know this, but a VA loan is not a one-time benefit, and there’s no limit to how many times you can apply for the loan. The law allows you to have multiple VA loans at the same time. Some people have gone ahead to secure second VA loans even after defaulting on their first loans.
Need help? Talk to an expert
Consult a Veterans United loan expert near you if you need any help securing a VA loan for your new primary residence. The specialist will guide you through the ropes to check your eligibility and ensure you get the loan for your dream home.