The home buying process for first-time home buyers is usually a daunting task, whether a veteran/member utilizing their VA home loan benefit or individuals buying a home via conventional financing. It is even more complicated if you are not aware of the steps. You may already be stressed out from PCSing OCONUS to Hawaii, so keep reading to find out what you, as a veteran need to do to buy your first home utilizing your VA loan. This guide will help you avoid many common mistakes that might happen along the way.
First-time Home Buyer
A first-time home buyer is someone who has never bought or sold a home before. The process of buying a home is different for each person, but there are some common steps.
First, get pre-approved for a loan before you start looking at homes. There are many reasons to get pre-approved:
- Getting pre-approved helps buyers understand their budget. Most home buyers, regardless of being first-time buyers, do not have a clue how much they can actually afford. So, getting pre-approved is imperative to understand your purchasing power. Without this, home buyers often waste their time looking at houses out of their price range, or, lamenting the fact they can only buy homes up to some pre-determined amount in their head. A pre-approval takes the guesswork out of the situation.
- A pre-approval shows sellers you are a serious buyer
- A pre-approval enables a buyer to put an offer quickly. In today’s crazy market, speed is very important. If you as a buyer are not pre-approved, and your bank takes a day or two to get you a pre-approval letter (We give same-day pre-approvals), then you will be waiting while the place you want to place an offer on could go under contract.
The pre-approval process is fairly simple. You will need to apply for a loan (you can apply online here ), and submit substantiating documents. These usually include:
- Paystubs/LES
- Bank Statements
- Tax Returns
Working with VA Mortgage Broker
There could be other documents you may need, and your VA mortgage broker will provide you with a list of specific documents you will need to provide based on your employment and the type of loan you are applying for.
Once you’re pre-approved, now you need to find a real estate agent. It’s during this point, or during the pre-approval process, you need to start looking for a real estate agent. Just like the process of choosing a loan officer, you should trust your real estate professional. Your real estate professional should not be high-pressure or pushy. Ultimately, both the real estate agent and mortgage officer work for you, not the other way around.
Find your home
Your real estate professional and your mortgage officer will work together closing during the process, but during your search, you will primarily be working with your agent. The real estate professional will contact the mortgage officer for homes you might be visiting soon to make sure the financing works. Although you might be pre-approved for a certain dollar amount, it’s really the monthly payment you need to be aware of. A $1,000,000 home might be cheaper monthly than a $900,000 condo, due to the Condo dues which would likely push the total monthly bill higher. This is where your mortgage officer will confirm you qualify for the house/condo.
Submit an offer
You’ve found a house you like, now you work with your agent and VA loan officer to submit an offer.
Your offer has been accepted! From here, your loan officer may ask for updated documents (paystubs, bank statements, etc), and your loan will be submitted for processing/underwriting. The mortgage officer will order an appraisal, and your loan will be submitted to underwriting. Your loan has specific guidelines which have to be met and the underwriter ensures everything meets the guidelines. Providing everything meets the guidelines, your loan will be “conditionally approved” meaning you will have to provide a few more documents, but your loan is a few short steps The biggest hurdle you have left is the appraisal. As long as the appraisal comes back with a value that you are under contract for, there will be no issues. After you submit the remaining documents and the appraisal comes back, your loan will be submitted for final approval.
You’ve received a final approval/clearance to close. Congratulations!!! The process is almost over! You will sign papers at the escrow company, or possibly with a mobile notary in this COVID era. After signing, the process will take another 2-3 days as the bank will fund the loan and the title recording will be registered with the government. Congratulations, you are now officially a homeowner!!!
