13 Jan Buy Your First Home With Zero Down Payment VA Loan
If you have a military career, the U.S. Department of Veterans Affairs may help you get mortgage-backed homeownership. VA loans are offered at zero down payments, lower interest rates, and do not require mortgage insurance.
However, the VA loan process could be tiring and may involve steps other mortgages don’t. Plus, not all sellers or real estate agents know thoroughly about the loan process.
Therefore, you must do your research and hire the right professionals to help you get a home in a competitive housing market.
Use the following steps to get your loan approved hassle-free –
Start with obtaining your certificate of eligibility.
This is the first step. Your VA certificate of eligibility shows you meet the requirements to apply for a VA loan. You must have the eligibility certificate to close the loan.
You can request VA for the eligibility, or a VA-approved lender can help you get it.
Choose a knowledgeable lender.
VA loans are offered by private lenders who prefer military borrowers more than others.
VA loan has its own rules. You may want to work with a lender who knows the requirements and can see you through the process. You can look for loan officers specialized in managing military borrowers.
You must plan how you will repay the loan.
VA loans have closing costs similar to any other mortgage loans. The VA loan closing cost is a fee charged to fund services and expenses, including the inspection cost, appraisal, title, and origination fees.
Closing costs may vary between 2% to 5% of the loan amount. A detailed breakdown of the fee is attached in the Loan Estimate.
Your VA loan may also require you to pay a VA funding fee, a one-time fee calculated based on your down payment and the fact whether you are a first-time borrower or have used your VA loan benefit earlier as well.
In case you can’t afford to pay these upfront costs, try one of these options –
• Request to add your funding fee to the loan amount. However, doing so means it will increase your monthly payment, and you will also pay interest on the funding fee over the entire loan tenure.
• You can request the seller to contribute as VA lets them contribute up to 4% of the loan amount, which you can use to pay off some closing costs and the funding fee. It could be challenging to convince sellers for concessions in such a competitive market.
• Ask your lender to cover closing costs in return for a higher interest rate. However, this will increase your monthly loan payment.
Choose a real estate agent who has an experience in serving military clients.
Since the VA loan process is a bit complex, you should hire an experienced real estate agent who understands VA financing.
An educated agent will see you through the loan process and speak to sellers on your behalf.
VA.org can help you find an experienced real estate agent for your VA loan.