First Time Home-Buying with a VA Mortgage Loan

Tips for #firsttimehomebuying with a #VALoan | Rose Colored Water #mortgage #personalfinance

Even though our first-time home-buying experience fell flat —leaving us jaded and angry—we almost made it through the entire process with our broker and realtor. I feel confident in relaying this experience to those who are interested in using a VA loan to buy their first home. There are questions that will come up that you may not be familiar with and you will have to make those decisions with the best of your ability. This can be overwhelming and stressful. I hope that some of what we went through can help you feel more knowledgeable going into this life-changing decision.

Tips for #firsttimehomebuying with a #VALoan | Rose Colored Water #mortgage #personalfinance

Mortgage Broker or Traditional Bank?

We decided to use a mortgage broker for our VA loan because he was a small, local business with a huge military clientele. He came highly recommended from my friend/realtor and had extremely low fees. That’s the difference between finding a small local broker and big bank.

I have many friends who have VA loans through Navy Federal and USAA, but a mortgage broker has a little more flexibility on interest rates and fees because they answer to fewer people. You may or may not pay more in fees if you go through a bank or broker. I recommend doing some individual research.

Our mortgage broker was awesome. He was always a call or email away and took time to answer all of our questions. He was quick in sending any information we needed, such as a letter of approval (allowing us to make an offer on a home), even if it was late in the evening. I hate that we wasted so much of his time when we ending up pulling out of the loan completely.

The Inspection

The inspection is one of the most crucial pieces in buying a home and you must have one completed if you are going to use a VA loan. It can make or break a deal because you can find out some really scary things about your home. If the seller refuses to fix the item or come down on the home price, you may have to walk away if you are short on cash to fix the issue yourself. This is a stressful time.

Once the inspection is done, you will have to choose what you would like to tell the seller to fix. You can pay for an expensive inspection where they look at the pipes, do Radon testing, and the general inspection, or you can pay less and have the minimum done. We paid for the fullest inspection because we believed we would absolutely get this home. It cost about $675.

Something important to note is that you can attend the inspection. Most inspectors won’t mind and will go over the details of what they found after the inspection is complete. This is a great learning opportunity for you and I recommend attending. I was at our inspection and I learned so much about the home! It was very informative.

Inspection Objections

Once you find out what the issues are, you give your objections. This is what you request the seller to fix. My realtor said that typically, you request 8-10 items to be fixed and hope that 4-5 of them are actually done. If you have a bigger, expensive issue, that is when you can begin negotiating on the price of the home, etc. This doesn’t always end wellfor the buyer.

We requested for two items to be fixed. We had extremely high levels of radon in the home, and the safety tag was missing from the electrical box. We requested that the seller fix the radon issue and have the energy company bring a new tag out for the box. The radon fix could be expensive, but the security tag was no biggy. Fortunately, he agreed to fix our two issues.

Note:

  • Just because something needs to be fixed doesn’t mean the seller has to fix it. We were fortunate that our home was really well done and didn’t have any major issues.
  • If the home deal falls through… you lose the inspection costs. It sucks. It’s horrible. Unfortuantely, it is the “risk of doing business.”

The VA Appraisal

When using a VA loan, you must have an appraisal done be a certified VA appraiser. This is typically done after the inspection. The appraisal is where our deal fell through. Just because a market is hot and the homes are selling like hotcakes doesn’t mean your home is worth what the seller is asking. A VA loan will only give you a loan for the amount the home appraises for. 

We bid $315,000 on the home we wanted to purchase. Unfortunately, the home only appraised for $275,000. The seller wanted us to bring cash to the table to make up the difference, but we obviously didn’t have any cash to bring, as most VA loan applicants don’t. We wouldn’t have brought that money to the table anyways because the home wasn’t worth going $40,000 underwater for. Still, it was sad to see this happen, because if the seller doesn’t want to come down on the price, you lose the home. End of story.

This is why it is very important to have a good idea about a home’s value before you bid on it. We ended up walking away from the deal because we didn’t have any additional money. After that, we were out of time in our apartment and we didn’t want to go through the possibility of losing another house, not to mention moving our stuff into storage while we searched for another place.

Typically, your appraisal is wrapped up in your closing costs/VA funding fee, but if you pull out of the deal with your broker/bank, you will be footing the bill. A VA appraisal costs about $750 now. In the end, we lost out on about $1500.

Hopefully, your home will appraise for close or more than the amount you bid on it and you’ll have a seller that’s willing to work with you if it doesn’t appraise high. Once the appraisal is done and the seller/buyer agree on a price, things move forward quickly.

Final Walkthrough

You will typically have your final walkthrough the day before you close on the home. This is to ensure that the seller has done all that he/she promised in the contract. It also proves that your home is ready to move into and there are no loose ends that need to be tied up.

Closing

Completing all of these items usually takes about 30-45 days. The day of closing should be a very exciting time. There will be a big meeting of all parties involved to sign paperwork, etc. After everything is signed and closing costs are paid, you will receive the keys to your new home.

Have you ever used a VA loan? Did I miss anything in the process? How was your experience?

Things You Need to Apply for a VA Home Loan

Are you applying for a VA Home Loan? Here's what you'll need. #va #homeloan #homebuying #military #airforce | Rose Colored Water

First, let me say that I am not a financial guru nor am I a loan expert or broker of any kind. This is common information you can find on the internet if you search for it.

As I mentioned a few weeks ago, Mike and I applied for our first VA home loan. It was slightly terrifying, but not overly difficult, thanks to my meticulous record-keeping from years past. If you’re thinking of buying a home with a VA loan, here’s exactly what you’ll need. I am unsure how this differs from a regular home loan, as I’ve never applied for one, so if you are on the fence about which one is better, you might do some research.

A VA loan requires no down payment and you’ll pay no PMI. A regular home loan requires a 20% down payment if you want to avoid Private Mortgage Insurance (PMI). Financial gurus will tell you not to buy a home if you don’t have the down-payment, because PMI is bullcrap and you don’t need that in your life.

Are you applying for a VA Home Loan? Here's what you'll need. #va #homeloan #homebuying #military #airforce | Rose Colored Water

Benefits of a VA Home Loan

First, let me quickly outline the benefits of a VA home loan. As I mentioned above:

  • VA home loans do not require a down payment. (But you can make a down payment if you want.)
  • VA home loans have no PMI (Private Mortgage Insurance). This is because the VA backs about 25% of the loan.
  • You can still qualify (though not guaranteed) if you have a low credit score.
  • Interest rates tend to be more competitive.
  • If you can’t make payments due to financial hardship, the VA may help you (for a short time).

The above reasons are why so many military members and veterans use VA home loans instead of traditional ones. Mike and I chose to apply for a VA home loan because there is no down payment, no PMI, low interest rates, and renting in Denver is ludicrously more expensive than buying.

Home values are still on the rise in Colorado, though slowing, and we believe that even if we don’t “make a profit,” we will break even if we have to sell. We’ve also considered keeping the home and renting it out to other military members when we are sent somewhere else. Who’s to say we won’t want to move back to Colorado after we’re done? Of course, we’re also considering bringing in a renter, even if just for a few months. I have several friends from work who might want to live in one of our rooms until they can save up a bit more money after moving out of the Air Force dorms.

No matter what happens, we’re very excited about having our own home. When I saw all the things we needed for the application, I freaked out a bit. Who keeps all of their W-2’s from years past? Thankfully, I had! I have kept all of our tax information since before Mike and I even got married. Talk about a determined girlfriend. I take care of my man, what can I say?

Without Mike’s income, I would have been eligible for a loan of $180,000. While that may sound like fortune’s, in Denver, that won’t even buy you a nice condo. Thankfully, together we can easily afford up to $300,000, and we were pre-approved for even more than that! Sadly, even that won’t get you much. Two years ago, you could buy a lovely home for around $270k. Now those homes are selling at $300-325,000.

So, if you’re thinking about getting a VA home loan, make sure you have all these documents before starting the process. There’s no need getting your hopes up only to find you don’t have the correct paperwork.

Documents You’ll Need to Apply for a VA Home Loan

  • Copy of Picture ID(s)
  • Most recent 30 days pay stubs for each employed applicant
  • Copy of DD-214 or an LES (depends on bank/broker)
  • 2 years W-2s for each employed applicant
  • 2 months bank statements (all pages front and back as applicable) for all accounts – must have enough money in account(s) to prove you have the money you plan/need to bring to closing
  • Home insurance (agent and contact information)
  • Last year’s tax return

Seem like a lot? It can be, especially if you’ve had more than a few jobs in the previous two years. Still, the work is worth it if you are ready to branch out and buy your own home.

Let me know if you have any questions going through the VA loan process. I’m currently in the thick of it, and I’ll answer any questions I can. 

Which Site has the Most Updated Real Estate Listings?

Who has the most accurate #homebuying information? Which #realtorwebsite is the best? | Rose Colored Water #housebuying #realestate

Before I start this post, I want to make one thing clear: I have no evidence or data to back up what I’m about to say. This is all based on my personal experience using these websites over the past 9 months. (Yes, I’ve been following the market that long.)

Okay, so there are many sites available to look for houses. Some are great while others are just okay. I’m going to share what I’ve seen since my husband and I got serious about house-hunting.

Who has the most accurate #homebuying information? Which #realtorwebsite is the best? | Rose Colored Water #housebuying #realestate

Here are the realty sites I’ve been using, rated best to worst.

1. REDFIN

I hadn’t given REDFIN much thought until I moved to Colorado. I thought because I hadn’t heard much about it that it would be less accurate on prices and listings. Boy, was I wrong! REDFIN has consistently been the most up-to-date real estate site out of all the typical sites. It consistently beats Zillow by days, sometimes weeks. Not to mention, if a house sells, they show it pending sale almost immediately. I have been pleasantly surprised with how quickly they list homes on the market and remove the ones that are no longer available. There is nothing worse than falling in love with a home, only to find that it isn’t available anymore.

2. Zillow

Zillow was my number one until I found REDFIN. I lived and breathed it. Then I got angry. I got angry because I had fallen in love with so many homes and they were no longer available! It only takes getting burned a few times to quickly tire of the bull. Still, I’m not sure how accurate REDFIN is in rural areas, so I recommend Zillow as a contender, especially if you’re not in a city. It is the best contender.

3. Realtor

Realtor.com has the luxury of posting homes for sale by the owner, so in that sense, it is good. However, it is not near as up-to-date as REDFIN or Zillow. I believe it used to be a top contender, but not anymore. I would definitely check it out to see if you’re missing out on any homes that might be available by the owner, but other than that, keep tabs on Zillow and REDFIN so you don’t miss out on great homes.

4. Trulia

Trulia is basically Zillow. It’s owned by Zillow, so the homes are the same. They might have better coverage in other areas, but here in the Denver area, they are always behind. I don’t use them much anymore, unless I’m looking for rentals.

5. Remax

Remax is a good site, but they aren’t as up-to-date as others. I will say that I don’t know that they allow their homes to be listed on REDFIN, because I’ll often see homes I’ve never seen before on other sites on theirs. I think Remax takes care of their own homes more than homes sold by other realty companies. That’s why I would stick to the aggregate sites listed above, but also keep tabs on Remax. You don’t want to miss that one possible dream home.

6. Coldwell Banker

Not really a contender out here. There aren’t too many Coldwell Banker realtors out here, so while they list homes on their site, they don’t seem super up-to-date. I wouldn’t use them if you’re looking in this area.

If you’re in the market for a home, keep your eyes and ears open and set up notifications on your phone. I have had all these apps on my phone at any one given time, so it helps me get the most up-to-date information from everyone.

Do you have any experience using these sites in your home search?