Buying a home with a VA-backed loan
See step-by-step best tips to help you buy your home through the benefits of the VA home loan program.
What kind of VA-backed loan do I need to purchase a house?
You will get this loan through a private lender such as a bank or mortgage company. We will guarantee part of the loan against loss, which will allow your lender to provide you with better loan conditions, such as choosing not to pay the down payment.
How can I buy a home with a VA-backed loan?
Buying a home is a complicated process, and getting a loan backed by Virginia is just one of the problems. Please follow the steps below.
Steps to starting the process and finding a home
Apply for your VA-backed housing loan qualification certificate
You need to show your COE to the lender to prove that you are eligible for mortgage benefits. Find out if you are eligible for COE Apply for your COE now.
Look at your current finances
Check your credit profile, income, expenses and monthly budget to make sure you are ready to buy a house. Decide how much mortgage to spend and make sure to include settlement fees in the total price.
Choose a lender
Remember, you will get a loan through a private bank, mortgage company or credit union (not through us). Lenders offer different loan interest rates and fees, so please shop around to best meet your needs.
Be prepared to pay the lender’s fees. Many lenders use VA-backed housing loans to charge veterans a fixed fee of 1% (sometimes called a “loan origination fee”).
The lender may also charge you additional fees. If you don’t know what to charge, please ask the lender. In some cases, lender fees can be negotiated.
Choose a real estate agent
Get advice about potential real estate agents online or from relatives, friends, and neighbors. Then meet with a few agents to find the one you like. Please read all agreements before signing with the agent.
Make sure you understand any fees, charges and commissions, as well as your rights and obligations in the buyer-agent relationship.
Shop for a home
Check the house within your price range until you find the one that suits you. When comparing houses, be sure to consider which factors are most important to you and your family.
This may include factors such as your need to commute to and from get off work and the quality of the local school.
Steps to buying your home
Once you’ve found the house you want to buy:
Work with your agent to put together and sign a purchase agreement
Make sure to include “VA escape clause” or “VA option clause” in the sales contract. If the property cannot be evaluated for the contract price, you can choose to cancel the contract.
Consult with your real estate agent for other suggestions that might make you want to cancel the contract, for example, if the house fails a house inspection. These options are called accidents.
Have the house inspected and appraised
We strongly recommend that you perform an inspection before buying a house to check for major defects.
An appraiser recognized by the State of Virginia will also appraise the house to ensure that it meets the basic property requirements (known as the minimum property requirement or MPR) and provide an opinion on the value of the house.
Please note that evaluation is not the same as inspection. If the assessed value of the property is not enough to obtain a loan, there are several options you can choose. you can:
- Require reconsideration of value (ROV). You can ask the real estate agent to provide valid sales data to the lender to show that the value of the property exceeds its assessed price. The lender will ask the assessor to reconsider based on this information.
- Renegotiation of the sales price. Ask the seller to lower the price to match the assessed value.
- Pay the difference between the assessed price and the selling price. To do this, you need to pay this fee at the end of the transaction.
Review pre-closing paperwork and give your lender any other needed information
Your lender must provide you with closure disclosure at least 3 business days before closure. Please read it carefully. It includes loan terms, fees, transaction fees, and your estimated monthly mortgage payment.
Your lender may also ask you to provide more information or documents at this time.
Close on your new home
Your case may be closed in a title company, escrow office or law firm. Be prepared to sign a lot of documents and make sure to take the time to read everything before signing.
After closing, you’re ready to move into your new home. Congratulations!