Buying a property with a VA loan is one of the smartest decisions qualified veterans can make. While the process works fairly similar to conventional mortgages, there are a few things that make using VA loans slightly different.
The Department of Veteran Affairs backs VA loans, which allow veterans to not pay a deposit on a property. This can be an excellent way into the property market but there are still ways it can go wrong.
To ensure you’re approaching the situation the relevant caution, here are 6 mistakes to avoid when buying a home using VA loans.
1. Not using a knowledgeable real estate agent
VA loans have numerous property restrictions that provide the Department of Veteran Affairs with confidence in the sale. It would be wrong to expect you to know these by heart, so rely on your real estate agent instead.
They should know the process intimately and should only show you properties that fit the criteria.
2. Buying above your means
Not needing to put down a deposit is great, right? Surely it means you have more money to spend on the property? Not necessarily. You’ll still need to make monthly payments to your lender on time regardless of your current financial situation.
Therefore, you should keep your budget well within your financial means and not overspend.
3. Don’t forget property is an investment
Just because you have access to a very competitive mortgage scheme doesn’t mean your property shouldn’t be a good one. Property is one of the most secure forms of financial investment and you should still shop around for an attractive home in a good area.
This way, when it comes time to sell you’ll get a much greater return on your investment.
4. Still monitor your credit score
Your credit score matters less for VA loans but it does still matter. While you’ll likely still qualify for a mortgage even if your score is bad, your interest rates will be higher.
If you’re not in a rush, consider working on your credit score before investigating your options.
5. Don’t forget to shop around
VA loans are a competitive market, just like standard home loans. You’ll find varying interest rates, some of which are more attractive than others. It pays to shop around to try and minimize your monthly repayments and interest rates.
You can find an evaluation of 9 of the top VA loan lenders here.
6. Don’t forget about the extra fees
Buying a home comes with lots of extra fees that aren’t included in the asking price. Regardless of the type of loan you take out, these often catch people out when it comes time to close.
Things like an inspection and appraisal cost, as do real estate fees. You should set aside as much as 10% of what the deposit would have been if using a standard loan provider.
7. Don’t overlook an inspection
Inspections aren’t required but they’re very useful. Learning about possible repairs before closing can help to adjust the price. Alternatively, you can get the seller to make the repairs before they leave. Either way, it’s useful to know about these issues before you move in.
If you get made aware of any repairs, ensure it’s written into the contract that they’ll either be sorted before you close or that the seller will reduce the asking price accordingly.
Using VA loans to buy a home can be an easier way into the property market for veterans. Even so, it’s worth treating the process as if your money was on the line because this will make you more cautious.
The most important advice is to find a real estate agent and a lender that works with your interests, as this will make the purchase much smoother.
Contact Florida’s Choice Realty
It is understandable to have additional questions and need further guidance. If so, give Florida’s Choice Realty a call. We can help you find the condo, townhouse or single-family dwelling of your dreams.
Begin your search for real estate in Jacksonville by working with a trusted Realtor from Florida’s Choice Realty. We’ll make your dream of home ownership a reality.