VA loans offer some unbeatable advantages for military home buyers, like $0 down payment, no mortgage insurance, and more lenient credit underwriting. They’re certainly a more specialized loan product, but buying a home with this hard-earned benefit isn’t all that different from buying with other loan types.
Having the right information and the right team in place can make a big difference.
We’re here to help—and we enlisted some top-notch real estate experts for the task.
Tip No. 1: Start with the right Realtor
To save yourself a lot of time (and an awful lot of headaches), look for a Realtor® who has VA experience—and the time to sit down and focus on your needs.
“Know your Realtor. Make sure it isn’t somebody that just says ‘OK, how much do you want to spend?’” says Bobby Middleton, a Realtor with The Middleton Group in San Antonio. “Get somebody that takes a bit of time with you.”
Although buying a home isn’t necessarily more complicated for veterans, it helps to have someone in your corner who knows the ropes. Ask another vet for a referral, or get help from Veterans United Realty to find the right pro.
Tip No. 2: Budget extra time to find the right home
Buying a home takes time—a luxury you might not have if you’re active military and need to move fast. If you’re really lucky, you’ll find the right home at the right price as soon as you start looking. But in many areas, the home search can take a lot longer, especially if you’re working on a tight budget.
“If you’re approved for $130,000 or under, you run into a lot of fixer-upper homes in my area,” she says. “It can be very difficult to find a house that is in good shape.”
While the VA will approve older homes, any home you’re considering will need to be free of major problems. Many fixer-uppers won’t fit that bill unless you or the seller is willing to pay for repairs in order for the loan to close.
Your competition might also get in the way. Middleton sees many homes get scooped up by investors, especially if the homes are more affordable than others in the neighborhood.
“You get these investors and they’re offering cash. The seller is going to have a hard time passing that up,” Middleton says.
If you do find a home and get your offer accepted, don’t forget to factor in time for escrow and closing. The good news is VA loans don’t take significantly longer to close than conventional financing. And remember to get pre-approved. Pre-approval gives you a clear look at your purchasing power, and home sellers love to see proof in hand that you have the financing to close the deal.
Tip No. 3: Use technology to help you browse
Moving from out of state? There’s no reason to hold off on shopping for a house—or even buying one—before you relocate. Many Realtors will be happy to view homes on your behalf and even make an offer without your being there.
But don’t just take the Realtor’s (or the photographer’s) word for it. If anyone is viewing homes for you, ask for videos that show everything.
“You want to see every last corner of the house, every room, any place that might be a potential repair issue,” Middleton says.
Want to do it live? Just ask your Realtor for a house tour through FaceTime or Skype.
Tip No. 4: Be cautious of financing requirements
It can be devastating to be denied the loan for the house of your dreams. To keep it from happening, pay close attention to the listing details.
If the seller has noted certain financing requirements, it might be a waste of time to view the property (and it puts you at risk of falling in love with something you can’t have). Some listings—especially fixer-uppers—will mandate cash or conventional loans only, Breton says.
Not only does that mean your VA loan isn’t what the seller is looking for, she says, but it also likely means the home won’t be approved for financing because of its condition.
“Typically, the reason is they know there is going to be an issue with the appraisal,” Breton says. “I avoid showing my clients these homes because I know we’re going to run into issues.”
While it can’t hurt to run a property with restricted financing by your Realtor, don’t put too much hope into it working out. Stick to listings that have more agreeable terms.