The process of buying a home is a bit different for veteran home buyers compared to regular buyers. Veteran buyers are able to use special loan products tailored specifically for veterans. These loans come with different qualifications, and require working with a lender or realtor who’s familiar with their requirements.
If you’re a veteran embarking on your first home purchase, it’s crucial to be aware of the home buying process and the potential pitfalls you could face. At Your Home Sold Guaranteed Realty - Barb Has the Buyers Team, our real estate team is proud to be veteran-owned and operated, which makes us a great choice to help guide veteran buyers through the real estate market.
In this article, we’ll discuss the top six mistakes that veterans often encounter when buying a home. By familiarizing yourself with these pitfalls, you can approach your home search with confidence and make sure you have a smooth and successful buying experience.
Not Researching the Different VA Loans Available
Some first-time veteran home buyers may not know there is a wide range of VA loan options available to them. Understanding the different types of VA loans can help veterans make informed decisions and use the best loan for their situation. There are four types of VA loans:
- Standard purchase loan: Designed for veterans purchasing a primary residence. It offers numerous benefits, including no down payment requirements. It can also be used to upgrade your current home or purchase land for building a new home.
- Cash-out refinance loan: Allows veterans to leverage the equity in their home and convert it into cash for home improvements. It can also be used to refinance a non-VA loan into a VA-backed loan.
- Interest Rate Reduction Refinance Loan: Ideal for veterans looking to refinance an existing VA-backed loan to secure a better interest rate. It enables borrowers to lower their current interest rate or switch from an adjustable-rate to a fixed-rate loan.
- Native American Direct Loan program: Specifically designed for veterans who are Native American or married to a Native American spouse. This program can be used to purchase a new home or make improvements to your current one on tribal land.
Additionally, some veteran home buyers may not be aware that they can have multiple VA loans simultaneously. If you believe having multiple loans could be advantageous for your home-buying situation, discuss what options are available with your lender.
Not Reviewing VA Loan Requirements
VA home loans have distinct requirements that differ from conventional loans. One of the most important ones is that you’ll need to provide a Certificate of Eligibility as proof of your military service. This certificate can be obtained by meeting the minimum number of days of active duty service.
The active duty service requirements for veterans depends on when they served in the military. But for current service members, the active duty service requirement is 90 continuous days. It’s important to note that eligible spouses can also apply for a VA loan.
Another key requirement for a VA loan is that the purchased home must serve as your primary residence. Additionally, the property must meet specific building codes and safety standards as determined by a VA home appraiser.
Once your eligibility for a VA loan is established, you must satisfy the lender’s requirements. These may include having a qualifying credit score, meeting the debt-to-income ratio, and other financial metrics. It’s important to note that these criteria can vary among lenders, so it’s advisable to interview multiple lenders and find one with requirements that align with your financial situation.
Not Choosing a Realtor Who’s Experienced With Veterans
A common mistake made by veteran home buyers is that any realtor can assist them in purchasing a home. However, this isn’t the case, especially if you’re using a VA home loan.
Getting a loan through the VA means the home-buying process differs slightly from that of average buyers. As a result, it is vital to collaborate with a realtor who specializes in working with veterans and can give you tailored advice based on your unique circumstances.
They should possess knowledge about VA loan products, the VA loan application process and its requirements, and other benefits available to veterans. They should also understand that many times veteran home buyers have short move-in windows, and may also have to turn around and sell their homes fast down the road.
Not Seeing if Lenders Offer Additional Benefits For Veterans
Another common error made by veteran home buyers is neglecting to ask their lender about benefits they offer to veterans.
In addition to the advantages of VA home loans, individual lenders may provide their own benefits, contingent upon meeting specific criteria. These could include waiving the fees for the origination or appraisal processes.
When you’re searching for the right lender to work with, it’s important to mention your veteran status and inquire about any benefits they have for veterans. It is advisable to speak with three to five different lenders before deciding on one to work with.
Not Budgeting Properly
VA home loans provide significant savings when purchasing a home. However, you’ll still need to budget for other home-buying expenses such as closing costs, appraisal fees, home inspection fees, and VA funding fees.
The VA funding fee supports the VA loan program for other veterans and can only be waived if specific disability criteria are met. The VA funding fee will be part of your monthly mortgage payments.
Understanding these costs enables you to establish an accurate budget and prevent any unexpected expenses.
Not Investing in a Home Inspection
Similar to conventional home appraisals, VA appraisals assess the value of a property. But they also verify that the home meets basic health and safety requirements as established by the VA. However, this doesn’t mean they should replace a separate home inspection.
While the VA appraisal ensures that the home meets basic building and safety standards, the appraiser does not conduct a thorough inspection like a professional home inspector would. The appraiser does not assess the plumbing, electrical, or HVAC systems, nor do they enter the attic or crawlspace.
Although VA appraisals are mandatory, home inspections technically are not. This can lead many veteran home buyers to believe that they can forgo a home inspection.
But home inspections are crucial to gain insights into the overall condition of the home’s structure and systems. It provides a comprehensive assessment, allowing you to understand any necessary repairs or maintenance that may be required.
Our Team Helps Veteran Home Buyers in Colorado Springs, CO
If you’re looking to buy a home in Colorado Springs, Colorado, our team at Your Home Sold Guaranteed Realty - Barb Has the Buyers Team can help. Not only are we regularly ranked as one of the best realtors in Colorado Springs, but we’re also a veteran-owned business.
Our team regularly gives back to the veteran community, both by helping veterans buy their dream homes as well as donating to charitable causes that help veterans.
We know the VA home loan process intimately and can walk you through what to expect, as well as recommend the best VA-friendly lenders.
We’ve helped many veterans find their dream homes and know we can do the same for you. Plus, our unique buyer guarantee makes the home-buying process risk-free and stress-free. This includes our Buyer Satisfaction guarantee.
To learn more about our guarantees or what it’s like working with our team, call 719-301-1802. You can also fill out the form on this page for more information.