The US Census Bureau reported in 2019, there are 17.4 million veterans, about 6.86% of the whole population in the US.
One of the things the US government has done to show gratitude and assist veterans for their service is to create the VA home loan program.
Buying a house, especially in today’s current market, is plenty challenging. If you’re a veteran hoping to buy a home, you’re likely looking for the best way to finance your mortgage.
Read on for five tips to help you find the best VA home loan for your dream home.
1. Know Your Personal Numbers
No matter which VA loan provider you eventually use, you will need to have your finances and information in order.
VA loans are much more lenient on credit scores than if you’re getting a traditional mortgage. You still need to have a firm handle on your finances.
The VA will look more closely at your ability to repay a VA home loan than other factors. They will closely consider your debt-to-income ratio. This is the money you use each month to pay your debts.
Generally speaking, you will need to work harder to get a VA loan if your debt-to-income ratio is over 41%.
2. Shop for Lenders
Your VA home loan won’t actually come from the VA. Instead, it’s backed by the VA through private lenders. No matter your loan type, you should always search for lenders.
The VA has its requirements, and then individual lenders will also have their requirements on top of that. They will also charge differently, so it’s smart to do the leg work and shop around.
3. Understand the VA Fees
It’s essential to understand how VA loans work regarding fees. The VA will charge you a VA funding fee. That fee is constant, no matter which lender you work with.
Then you will have lenders’ fees to consider too. You want to look closely at those as they can vary significantly from lender to lender.
4. Understand APR and Its Impact on Your Mortgage
When comparing loan costs, many homebuyers look only at interest rates. A lender might offer you a VA home loan with a stated interest rate. Yet, you want to dig further into their costs.
You want to look closely at the annual percentage rate or APR. This is the interest rate being charged, plus the lender’s fees.
Most people assume you should always go with the lowest rate. Yet, because fees can vary so greatly, sometimes a slightly higher rate might be better after considering the APR.
This is also true of VA loan rates.
5. Find the Right Lender for Your Situation
Many home financing options are available for all kinds of buyers. For example, you might need a lender specializing in loans for a lower credit score.
You might need a lender who will approve a VA loan for the property you wish to purchase.
Find the Best VA Home Loan
A VA home loan is often a great opportunity for veterans to buy a home with fewer stringent requirements and less downpayment than other home loan options.
Learn more about VA home rates available by checking out our website.