It’s always great to hear from other Veterans about their experience buying a home using a VA Loan. Here’s some knowledge and advice from Brittani Tamayo-Krebbs and Connor Krebbs, first-time home buyers.
Make Sure You Have Cash Set Aside for Closing Costs
The first thing they encourage Veterans looking for buy home to do before you do anything is just save up a good amount of money. Although a VA loan requires zero money down on the price of the home, you still need money for closing costs, for your inspection, and for any amenities you might need that the house doesn’t offer, like a washer and dryer. Of if it doesn’t have a fridge or whatever the case may be. You might want new furniture or something.
So just save up a good amount of money so that you know what you’re working with. For Brittani and Connor, they had to save up about $6,000 for closing costs. You don’t have to save up like a huge amount of money but they recommend having about $8,000 for closing costs with a VA loan. And to do that before you do anything else. That way you’re set and secure.
Know How Much You Want To Pay Per Month
The second thing you’ll want to do is determine how much you want to pay per month, which will also determine the overall cost of how much you are going to be paying for your home. There are mortgage calculators out there that you can use like apps, or you can also use Redfin, Trulia, and Zillow. You can type in the overall cost of your home that you’re looking at. So say you’re looking at a $400,000 home and you write in 400,000, then you put in zero down because you’re using the VA loan. And then you put in the interest rate. That could be probably around 4.5 percent, and let the calculators come out with your overall mortgage cost.
Now if the mortgage cost is way too high for you, you’ll need to adjust the overall cost of your home. You may need to go down to $375,000, or maybe $350,000. See where you’re at and what you can buy based on how much it tells you your mortgage cost is going to be.
Live Below Your Means
Once you figure out how much you can afford, then you can start looking for homes. What Brittani and Connor did, and what they would encourage you to do, is always live below your means. They love saving and it’s nice to have extra money if you want to purchase other things, like big appliances or just things for yourself. And so whenever you figure out your mortgage cost, don’t live above your means or right at your means. Try to find something that’s a little bit lower.
Once you figured out how much you want to pay per month, stick with that number on all of your searches. Try not to go above it. In fact, try to stay below or at it because, again, you don’t want to live above your means. You want to have money available for circumstances that pop up in the future. And whenever you tell your realtor and your lender about your desired house price, tell them they need to stick with it too.
Find A Good Realtor and Lender With VA Experience
The next thing they recommend is finding a strong realtor with good VA background experience. And also a good lender that has VA experience. Having those two things is going to make it a lot easier on you when you go VA home shopping.
They felt blessed finding a realtor who was not only former military, but her husband is currently in the military, and so she understands how the VA loan works because they utilize it themselves. And their lender was prior Navy and so he understands VA loans as well. Brittani and Connor thought the process was going to be more difficult and hard to understand, but their realtor and lender made it so much easier for them when it came to paperwork and logistics.
Make Use of Military Community Facebook Pages
A great thing about being in the military community is having military community Facebook pages. And that’s one way Brittani and Connor were able to find both their realtor and their lender. Feel free to post comments such as “Does anyone know a good realtor?” You’ll likely get a long list of people recommended.
Brittani recommends that if you’re looking for a realtor, definitely go onto one of those Facebook pages and ask the rest of the military wives who have they been using, what experience have they had, and any other questions you may have.
Location. Location. Location. Don’t Focus Exclusively On Price
As part of the home buying process, make sure you research the neighborhoods that you want to live in, and not solely focus on price. There are websites like AreaVibes and Trulia that will show you crime rates, school districts, and how good those schools are. It’ll also show you whether or not it has Home Owners Association (HOA) dues and other interesting and important tidbits.
One great feature about both AreaVibes and Trulia is that each gives an overall rating of that neighborhood, like “B+”. The bonus with Trulia is it goes down to the street level, and shows you all the crime that’s happened in that area. So you can research things like: “I want to live in a B plus neighborhood, but I want to know if this street has had any suspicious stuff going on.”
Before looking at houses, they wanted to narrow down the neighborhoods that they were going to live in and also the cost of the house that they were going to buy. And so they did those two things before they even started to look at houses, and they recommend you do the same.
Putting In An Offer On A Home
The next thing you’re going to want to do is put an offer on a home. And you want to make sure that it’s in your price range and you like everything about it. Brittani and Connor put down two offers on two different homes.
For the first home they put an offer on, the seller was going to wait for more offers, which sellers are allowed to do. So you can put an offer on a home, but if the owner decides they want more money, they can wait for other offers to come in, hoping that the offers are higher. So, at a certain point, it can become a waiting game until the seller says yes to your offer, or another offer comes in and beats your offer.
The second home they put an offer on (which is the house they ended up purchasing) had the offer accepted the next day.
Know that sellers can counteroffer. So if you offered too low a price, say $10,000 below asking price, sellers can bump it to whatever they like, such as $5,000 below asking price. It becomes a negotiation where you both try to get to a mutually agreeable point.
You can put offers on as many different houses as you want at the same time. But once one of the offers is accepted and you sign that contract, you can’t go and look at any other houses.
Inspections and Appraisals
Be prepared for both an inspection and an appraisal, which happens after the offer.
First the inspection. With a VA loan, everything has to be up in great shape, because the VA doesn’t want to guarantee a loan for a home that’s riddled with problems. And so the inspection is really important to the lenders.
Most inspections end up requiring a few things that will need to be fixed by the sellers before you move in, so that’s a plus for you.
Next comes the appraisal, which simply assesses the cost of the home which you hope will end up being in the ballpark of what you offered!
And Then You Wait…
Once the inspection and appraisal are complete, you’ll spend most of your time waiting until the closing date arrives. There will be some paperwork and closing costs that need to be addressed, but by-and-large you’ll spend most of your time being both excited and nervous, waiting until you can finally move into your beautiful new home.
Hope you found this information helpful. In case you’re interested, here’s a video of Brittani and Connor talking about their experience.