What You Should Know When Looking for a First Home

There is nothing happier or scarier than buying a home for the first time. It can take years to find the home you want to purchase and almost as long to find the financing you need to get into the home. There are a few tricks that will help you to get the kind of home you are looking for and make it affordable. You will need to make sure that you are aware of what your budget is when looking for a home, get a good rate on your mortgage, and ensure you have the right insurance for protecting your new home. This will help you to enjoy it faster than you might have thought possible.

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VA Loan Volume Continues to Increase

veteran admin home loanWith 2012 seeing the highest volume of VA-backed mortgages in 18 years, it’s becoming more and more apparent that VA loans are the best choice of home loans for veterans. Private, more conventional loans can be extra difficult and much more expensive for veterans to acquire.

VA-backed loans were literally made for veterans. Being backed by the VA allows lenders to offer things like no money down, competitive rates, and make it easier to qualify for a loan. It’s no wonder why there’s been a rise in loan numbers. But how does the VA loan process work?

Getting Started

The first thing you want to do is research lenders. Find a company that you like, and contact them. If you are getting a VA-backed loan, working with VA-specific lenders will make the home-buying process easier for you. A VA lender is used to working with the VA and can help you navigate veteran-specific guidelines and qualifications better than a private lender would be able to.

Once you’ve contacted your chosen lender, you’ll give them your personal and financial information, your loan needs, and any other information they might require. They can usually get you prequalified in less than ten minutes.

A lot of people think that you have to have a Certificate of Eligibility (COE) before you contact your lender. This isn’t true; you can get prequalified before receiving your COE. Later in the loan process, your lender will contact the VA directly for this so you don’t have to worry about trying to get one on your own.

Fill Out an Application

After your initial pre-approval, your lending company will send you a packet of documents to fill out. After you’ve complete this paperwork, you’ll send it back to your lender. Once they’ve received your completed documents, they will issue you a letter of preapproval, and you can start looking for your dream home.

Eligibility

After your lender has received and started processing your paperwork, they’ll use a copy of your DD-214 to obtain your COE from the VA. This is the preferable method of getting a COE; your lender will have your COE within seconds, compared to the 6-8 weeks it would take you if you tried to get it from the VA yourself.

Purchase Agreement

Once you’ve picked out your new home and met VA loan guidelines, you’ll be asked to sign a Contract of Sale, or Purchase Agreement. Your lender will tell you if there are any details left to sort out, and they’ll assist you in getting those taken care of. This is the last step before your loan is sent to an underwriter.

Underwriting and Closing

After you’ve signed your Contract of Sale, your loan will be sent to an underwriter for review and approval. Your underwriter will verify your personal and financial information, and request additional details and history if necessary. After they’ve approved your loan, a closing date will be scheduled. At closing, you’ll sign the final paperwork for your home and get your keys.

Chris Birk is the director of content development for VA Loans Insider, a resource for military families and veterans on the latest news and information for homeownership using their VA benefits. Connect with him on Google+.  

Photo by: tmview

How to Secure a Great Home Loan in These Tough Financial Times

home loanMost people dream of owning their own homes, however not everyone has the funds and means to be able to do so, particularly in these tough financial times when home loans are more difficult to obtain, or housing prices, way out of our reach.  For the majority of us, securing a home loan is the only way to reach our dreams of owning a home.  However difficult this may seem in the current market, financial experts say that it is achievable to secure a great home loan in these current financial times.

Firstly, you have to assess your current financial situation; the amount of savings you have, your assets, income, expenses, and any other loans you may have.  Being aware of the financial aspect s of your life, will allow you determine the type of mortgage which will best suit your circumstances. Alternatively, a professional home loan consultant or mortgage broker can help you find the right home loan

There are many different loans to choose from:  variable rate loans, fixed rate loans, split or combined loans, and lo doc home loans.  Different rates apply for each and there are pros and cons to all. It may seem overwhelming at the time, but doing your research on each type of home loan will mean saving time, money and stress. You know what they say, knowledge is power, and if you walk into a meeting with a mortgage broker, armed with relevant questions and a detailed understanding of each home loan, you will benefit greatly.

Maintaining a good credit history can also be an effective way to secure a great deal on a home loan. Make sure that you don’t miss a credit card payment, never fail to pay a previous loan or have never been declared bankrupt. If you follow the above steps, you should be able secure a great home loan even when weathering the financial storm.

Which type of home loan have you used before?

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