This is a contributing article written by Brittany Fisher at Financially Well
Buying a home is a major commitment. As a veteran, you understand what it means to take on responsibilities and honor your obligations, even when things get difficult. Even so, the path to becoming a homeowner is a challenging and, at times, unpredictable journey. These steps can help streamline your home-buying experience.
- Prepare Your Finances
There are programs designed to give veterans an edge in qualifying for a home loan. However, there are still basic criteria that any potential home buyer must satisfy to be eligible for financing.
Your credit score plays a big role in qualifying for the best financing terms. Pull a copy of your credit report and check your credit score. Another important number for mortgage lenders is your debt-to-income ratio. Your DTI is the percentage of your income that you must use to make the minimum payments on your debts each month.
To ensure that you’ll qualify for the best possible financing terms, work on paying down debts and improving your credit score. Don’t take out any new loans or run any credit checks for 6-12 months before applying for a mortgage.
Also, work on saving up for a down payment, which can dramatically increase your buying power.
- Choose the Right Financing Option
Most veterans are eligible for home loans backed by the U.S. Department of Veterans Affairs. VA loans typically have looser credit requirements than conventional mortgages, and most don’t require a down payment. Unlike traditional loans, VA mortgages don’t require private mortgage insurance. Many states also offer additional housing benefits for veterans and their families. You’re not limited to a VA-backed loan just because you’re a veteran. In some cases, another type of loan, such as an FHA loan, a USDA loan, or a conventional mortgage, may be a better choice. Always discuss all your loan options with your potential lender to be sure you get the best deal.
- Find Your Dream Home
You’ve probably done plenty of moving during your time in the service. In the process, you likely gained a lot of invaluable knowledge about what housing features work best for you and your family. Put that experience to use by creating a list of must-haves, dealbreakers, and other criteria for your dream home. Then, do some online research to check out the housing market in the area where you’d like to live. Working with an experienced and dedicated real estate agent like Kristi Lucero at this point is a smart choice, as she’ll have expert knowledge about the local market.
- Close the Deal
When you’ve found the perfect home, your real estate agent can help you make a smart offer. If the seller accepts, the next step is closing on the sale, which means preparing for closing costs. Closing costs typically include such things as lender fees, inspection and appraisal costs, document registration expenses, and agent commissions.
Research shows that average closing costs add up to around 2-5% of your home’s purchase price, and this can come as a surprise to some buyers. You can often take steps to reduce your closing costs, including rolling some fees into your loan, stipulating in your offer that the seller pay some or all closing costs, comparing lenders and avoiding high lender fees, or even buying a lower-priced home.
Settling down and buying a home is a major milestone for any veteran. Taking the time to do some research and preparing for the process will help you have a great home-buying experience.
If you’re selling or purchasing a home in Great Falls and the surrounding areas, reach out to skilled real estate professional Kristi Lucero!