Should You use your VA Home Loan Benefit during your Military PCS?
The military provides you with a host of benefits that civilians don’t have access to. One of these benefits is the VA home loan program. This mortgage program, unique to the Department of Veterans Affairs, provides competitive home loan choices with no money down for both qualified active duty service members, veterans and reservists.
Should you take advantage of your home loan entitlement and buy a new home and if so, what are the steps you should take?
Why Use your VA Home Loan Benefit Now?
The current housing market could provide the best buying opportunity in decades. Even longer. Why? We’re at the unique stage where home prices have stopped their free fall and appear to have stabilized while at the same time mortgage rates are still at or near historic lows.
Home sales fell dramatically over the past few years as the economy slowed, housing demand subsided, and property values dropped, precipitously in certain areas. The economic recession put the brakes on a recovery as it put many out of work over an extended period.
While the period from 2007 to 2009 wasn’t very pretty, the end result is that home affordability is at some of its best levels even seen. You can now buy more home than perhaps at any other time in your life.
Long Distance House Hunting
Here is where the power of the internet and the resources available from your PCS Travel Section help to make shopping for a house an easy experience. Relocation services help you with assistance from finding a real estate agent to managing the details of a long distance move.
You can certainly select any agent you want to help you search for a home but at minimum the agent needs to be experienced working with military members. VA home loans have a few unique characteristics that agents should be aware of. These would include negotiating to have the seller pay your closing costs and properly presenting an offer with VA financing.
Travel Services can provide you with the names and contact information of real estate agents who specifically work with PCS members and families. Find a real estate agent you feel comfortable with, who answers your questions and is always available for you to speak with.
Talk to your agent and express your priorities such as living close to the base, your desire for quality public schools or other important lifestyle factors. Your agent will provide you with a list of homes as they are listed for sale and provide important advice on which homes seem like a good deal and which homes to avoid. Your agent will also ask that you get preapproved for a VA loan.
The VA Preapproval Process
If you’ve used your VA home loan entitlement before this section will refresh your memory. If it’s your first time to buy a home, there are some things you need to do to get preapproved by a VA lender.
Your first step is to find a lender authorized to approve VA home loans. Some lenders are not fully approved by the VA to completely underwrite and process a VA home loan application. They are only able to take a loan application from you and then forward it (broker it) to a qualified VA lender.
Ask your real estate agent for referrals to VA lenders in your area and make a few phone calls. When you speak with a loan officer, be prepared to provide information regarding your current gross household monthly income, your credit history and other financial information.
With a quick conversation, a loan officer can tell you the approximate price range of homes you’re qualified to finance. Once you’ve selected the VA lender you’re going to work with, you will then begin documenting your loan request by completing your loan application and providing requested documentation such as your W2 forms, tax returns, recent pay check stubs and bank information.
The loan officer will review your documentation. If you are qualified, you will then be provided with a letter stating that you are preapproved for a VA home loan.
Final VA Home Loan Approval
Once you’ve identified your new home, your loan officer will order the property appraisal, title insurance and other needed documents and send your completed loan file to the underwriter for an approval.
This final approval is a little different than the preapproval in that it’s the underwriter’s final determination that your loan file is ready for final loan documents. The preapproval is the loan officer’s best judgment as to whether you are able to get the final approval after the necessary steps.
Once the home has been appraised and your file has been reviewed, your loan papers will be drawn for your signature. You don’t have to travel to your new PCS to sign your closing papers, as they can be overnighted to a local notary who will assist in the signing and notarize necessary documents.
VA home loans are approved much like other home loans. While there are a few unique features of VA loans, using the internet to search for homes, apply for a VA loan and sign your documents remotely, buying a home long distance has never been easier. Take advantage of low rates and low home prices. Think about buying with this PCS move.