Financing a Home as a First Time Home Buyer with a VA Loan

When you’ve finished serving your country, let your country serve you. Depending on your eligibility, the U.S. Department of Veterans Affairs can help with your first-time homebuyer VA loan. The VA will insure one quarter of their loan limit, which is typically $647,200 in most areas. This means if you default on your loan, the VA will repay 25% of your commitment. As a result, lenders like OVM Financial can provide you with helpful benefits, including the following:

• Competitive interest rates
• Zero down payment
• No monthly mortgage insurance requirements
• Seller-paid closing costs and concessions

Where do you get started? In addition to reviewing VA loan qualifications, here’s some advice to secure a first-time homebuyer VA loan:

Prepare to purchase your first home

Though there are several steps, such as reviewing your finances and shopping for a real estate agent, preparing to purchase your first home is fairly simple. Here’s how to get the ball rolling:

• Step 1: Meet with a Loan Officer.  Your loan officer will review your VA loan application, evaluate your credit score, expenses, and income to issue your VA loan preapproval. Your preapproval will help you determine how much you’re approved to borrow. It’s a great starting point to help you determine a comfortable home-buying budget. Don’t forget to also account for other fees, such as closing costs, homeowners insurance, and moving expenses when setting your budget.
• Step 2: Apply for a Certificate of Eligibility (COE). This will prove to your financial institution that you’re eligible for a first-time homebuyer VA loan. You can apply for your COE through the U.S. Department of Veterans Affairs, or we can take care of this part of the process for you.
• Step 3: Choose a real estate agent. Ask friends and family members for agent recommendations. Then meet with multiple professionals to determine the one you like best. You should carefully read all agency agreements before signing and fully understand any additional fees you should include in your budget.
• Step 4: Determine what you’re looking for in a home. Do you prefer an open concept? What neighborhood characteristics are important—close proximity to a school, shopping, entertainment, or your workplace? How many bedrooms would you like?
• Step 5: Start shopping for your home. Compare properties in your price range until you find one that suits your needs and budget.

Finalize your first-time homeowner VA loan

Once you’ve found the property you want, work with your real estate agent to construct an offer or purchase agreement. Here are a few things to keep in mind:

• Schedule a home appraisal. Before you close, hire a VA-approved appraiser to check for major or minor property defects. The appraiser will ensure the home meets basic minimum property requirements (MPRs) and provide an estimate of the home’s value.
• Include the VA Escape Clause in your contract. This will protect you should the property appraise for less than the contracted price.
• Ask your real estate agent about other appropriate contingencies. For example, your contract could include an opt-out clause, or “contingency,” should the property fail its home inspection.
• Review all paperwork thoroughly. Before you sign on the dotted line, make sure you fully understand all contract terms, including fees and closing costs.

Our experts at OVM Financial are ready to assist you during this exciting time. Contact an OVM agent today, or start your online application. For more helpful information, check out our posts about how VA loans are different and how VA loans can cover closing costs.