For our neighbors who are serving on Active Duty, and our retired veterans, here are our top 6 tips for buying a home with VA financing. Most veterans and military families opt to use VA financing, as it offers many benefits such as: No down payment needed, no mortgage insurance required, lower interest rates, and no early payoff penalties. Those are great reasons to use VA financing for your new home.
1. Check your credit report, and ensure it doesn’t contain errors.
If it does, take steps with the three credit reporting agencies to update and correct your report. This is a standard home buying preparation tip, but it’s a good one for active duty military, spouses, and veterans, too. Most lenders require a 620 credit score or higher for VA loans, so if you need to do some credit score improvement, now is a great time to start.
2. Choose a lender.
We strongly recommend choosing a lender with a local office. Ask around for recommendations from friends and family or review our lender contacts and talk to the lenders about their requirements and process for VA loans. This will help you feel comfortable and confident in your choice.
3. Verify your eligibility for a VA loan.
You can do it through your lender, or you can obtain your Certificate of Eligibility on your own. Applying for it yourself ensures you’ll have it with you if you change lenders mid-process. Many lenders will offer to help you get your COE later in the homebuying process, but starting out with your COE makes it simple to get pre-qualified and pre-approved!
Doing it yourself? Go online to the U.S. Department of Veterans Affairs website and apply online OR download a COE request form (VBA form 26-1880). Fill it out and mail it in to the VA. They’ll mail your COE to you upon processing and verifying your request.
4. Be ready to present proof of service to your lender.
You will need one of the following:
- Active Duty or Guard or Reserve Service (Current Statement of Service)
- Honorable discharge (DD 214 showing items 24 and 28, or NGB 22 or 23 with proof of character of service showing)
- Proof of your spouse’s death in the line of duty or as a result of a service-related disability (VBA 26-1817 or VBA 21-534 and DD 214 (if available)), and a death certificate or DD 1300.
Need help wading through the system? Call 800-983-0937, Monday-Friday from 8am-8pm EST.
5. Gather documentation of your income.
Pay stubs, bank statements, tax returns and W2s, as well as an employment history (use your resume if you like), and documentation of any other Real Estate you own. Contact your lender of choice to find out exactly what they require, but these are the basics.
6. Get pre-qualified and pre-approved for your loan.
Knowing the exact amount of the loan you have been approved for makes house-hunting so much easier. You know exactly what you can afford, and your Realtor can negotiate for the best deal for you with confidence!
With our top six tips for buying a home with VA financing, you’ll be ready to search for your new home with all the information and confidence you’ll need. Even better? You will be in an excellent bargaining position once you find your dream home. Happy home buying!