Owning a home is a dream for many people and can be a great way to build long-term wealth and have a consistent place to call home. For someone that is a veteran of the armed forces, taking advantage of the VA home loan program is often an ideal option.
For those that would like to take out a VA mortgage, it is important to understand the unique rules that can come with it. If a veteran would like to purchase a condo using a VA home loan, there are several tips and steps that should be followed.
Check the Approved Condo List
If you want to purchase a condo using the VA home loan program, one of the steps to follow is to ensure that the condo you want to buy is on the approved condo list. The VA approved condo list was designed to ensure that veterans are using the VA loans to purchase quality condos. This list is updated regularly and will let you know if your condo will qualify for the loan program.
The list could also include condos that are approved with certain conditions that will need to be met prior to closing on the final purchase. Checking this list is an important first step in the condo purchase process.
Speak with a Lender
When you are going to purchase a condo, it is important that you speak with a lender early in the process. As the real estate market continues to be competitive for buyers, you will want to have your financing in order before you make a purchase offer on a condo.
Your mortgage lender can explain the requirements for a VA home loan and can let you know what the basic qualifications for approval are. This part of the process will also include a high-level underwriting, which will let you know how much of a loan and purchase you can qualify for based on your particular situation.
Know the Process
If you are going to get a VA home loan, having a pre-approval letter is important. However, it is important to remember that the process will continue for a while after you have submitted an offer on a home.
A VA home loan can take much longer than a traditional mortgage in terms of underwriting and approval timelines. Due to this, it is important to get a firm understanding from the lender for when you can close on the loan. When you are going to submit an offer, you should incorporate this extended approval schedule into the contract, as it will help ensure you are able to meet the deadlines in the agreement.
Know the Guidelines
A VA home loan is a good option for a lot of borrowers because it does not have stringent underwriting guidelines compared to traditional home loans. Borrowers typically do not need to have a down payment, will have minimal closing costs, and can avoid having to pay PMI.
However, a mortgage lender will still want to know that you can afford the mortgage payment and have an acceptable credit history. You should make sure you know these requirements and expectations and verify that you will meet them.
Gather All Necessary Information
As you are looking to close on the home purchase with a VA loan, you will need to provide several different pieces of information along the way. Your mortgage lender will want to see copies of your tax returns, bank statements, payroll reports, and other information that will be used to underwrite your loan.
Your lender will likely provide you a list of information needed early on in the process. You should always do your best to ensure that you get all of this information in as soon as you can, which can help to expedite the process.
A veteran that is looking to purchase any type of home should consider using a VA loan. These loans typically do not have the same down payment and other financial requirements as a standard mortgage. However, there are some unique rules that need to be followed. It is important to follow these tips and steps to ensure you get the loan you need to purchase your dream condo.