Tips for Purchasing a Home as a Veteran from Rhonda Underhill

The typical home buying process is surprisingly complex. If you’re a veteran struggling with financial issues, you want to make sure you’re ready for what lies ahead. If you’re a veteran that wants to buy a house, here’s what you need to know about the process, presented by Rockland Homes for Heroes, but written by Rhonda Underhill. I hope it helps everyone.

Straighten Out Your Finances

Before you start your home search, it’s necessary to organize your financial life. The Veterans Benefits Administration offers many resources on financial literacy. The VA also offers many financial services.

There are also educational resources available. Habitat for Humanity, for example, offers free educational workbooks for financial literacy.

Financing a Home Purchase

For most loan types, you’ll need a credit score of at least 580 to 620. Even if you get a VA loan – which may not have a minimum score – a higher score leads to better interest rates, so it’s still important. Review your credit report so that you can dispute any errors, ensuring yours is as high as possible.

Paying down debt is another great move. Most lenders prefer debt-to-income ratios at or below 36 percent. Plus, less debt might boost your credit score, making it a win-win.

Since finding an affordable home is a priority, you need to determine how much you can spend. Usually, your mortgage payment shouldn’t be any more than 28 percent of your gross monthly income. Additionally, it’s important to note that your property taxes and homeowner’s insurance payments get wrapped into your mortgage, making your final monthly payment higher than you may expect.

Select the Right Kind of Home Loan

Choosing the right kind of mortgage is critical. Typically, your home loan options fall into these five categories:

• Conventional
• VA
• FHA
• USDA
• Jumbo

Each option has its own benefits, drawbacks, and requirements. As a result, it’s smart to dig into each one to see if any of the options better meet your needs.

You’ll also find two mortgage sub-types: variable (adjustable-rate) and fixed-rate loans. With variable interest rates, the rate changes per an underlying benchmark, such as the federal funds rate. Fixed-rate mortgages have rates that don’t change.

After reviewing your options and choosing a path that meets your needs, you’ll pick a lender and go through the preapproval process. That lets you see the amount you could borrow, as well as your interest rate.

Finding Your Perfect Property

Once you have a preapproval letter, reach out to a real estate professional. They’ll assist you with your home search, creating offers, negotiating, and closing. Going through a real estate agent or realtor is the best way to find great prices on homes. Shopping for homes online may be convenient, but there are a number of different factors at work that can keep you from getting the best deal.

After picking a professional to help you through the process, spend time reviewing your must-haves with them. This can include your budget, home features, preferred neighborhoods, and anything else you find critical.

As you complete house tours, give your realtor feedback. If you’re concerned about things like fall hazards, prepare a list of things you want to avoid in a home. That way, they can refine their search over time, increasing the odds that they’ll locate the right property for you.

From Your Offer to Closing

When you find a property, it’s time to make an offer. You’ll need to list a proposed purchase price, as well as any other requirements or requests, like asking the seller to cover closing.

Usually, there are some negotiations after your initial offer. If you and the seller can agree on the terms, you’ll schedule an appraisal and a home inspection. After that, there’s more negotiating. You may ask for a price change based on the results or request certain repairs.

Once you and the seller agree on the terms again, the closing moves forward. Your lender will finalize your loan, and you’ll schedule a closing date. Then, you’ll have a meeting where you sign the paperwork and get the keys, making the house officially yours.

To help end veteran homelessness in New York’s mid-Hudson Valley, visit Rockland Homes for Heroes today! Thank you Rhonda.