VA LOAN: What it is and how to get one

A VA loan is guaranteed by the Veterans Administration. It might be better to use the term insured by the VA since that is what the VA does. A VA loan is not a loan from the VA. You must qualify for the loan through a traditional bank. A VA loan is different because it allows veterans to get loans at competitive interest rates without charging PMI private mortgage insurance. To qualify you must have previously served or currently be serving in the armed forces. To get your certificate of eligibility, fill out the VBA Form 26-1880 and bring it with you to the bank. Or, you can send it in now and take your certificate with you when going to your appointment for your loan.

The next step is qualifying for your VA loan. You can qualify for a VA loan through a traditional bank either using your current bank or shopping around for other lenders. You are qualified for the loan after your loan application is processed through the bank or other lending institution. For the loan application process, some items you’ll need to bring with you with the loan application are:

    LES or retirement pay statement
    W2 for two years
    Two months’ bank statements for all accounts
    Statements from mutual funds and/or investments
    Rental property lease agreements with two years’ tax returns
    Credit card statements
    Current and prior landlords names and addresses
    Statement of service from commander or DD214 copy 4 if you’re retired
    Two picture ID’s are best(Military ID, driver’s license) and your Social Security card
    PCS orders for San Antonio or other new duty station

These are fairly standard with all lending institutions. It will reduce the time it takes to get your loan application approved by having them at your initial visit. Each loan institution is different and your personal circumstances may require additional documentation. DO NOT BE DISCOURAGED! The lending institution will pull a tri-merge credit report for your application approval, either charging for this at loan application or rolling it into their fees at the closing of the loan.

Generally, the credit report fee is less than $100, however may vary. Once approved, you know what you qualify for. Now you must make a decision regarding the monthly payment amount are you comfortable with? Please consider this step with caution. You do not want to place yourself in the situation where your pay and allowances do not cover you monthly costs and you or your spouse are forced to seek additional employment. Many have fallen into this situation in the past.

As a 30-year veteran, I encourage you to consider counseling on your home purchase prior to actually starting your search. Every military installation has this type of assistance available. Check with your finance/military pay office of contact the local VA Office (see the links on this page).

If you are stationed in Texas you very well may qualify for a TxVET loan.  This is a buy down of the interest through the Texas Veterans Land Board.  Check them out to see what savings they may be able to provide you too.

  Selecting the right home
Now you need to determine what type of house is the right house for you. There are several things to consider:

    Do you expect any more additions to your family?
    What is the travel time to work?
    What is the neighborhood like? (Also visit during the early evening and on the weekend.)
    How close to shopping do we want to be?
    What school district will our child(ren) be in?
    How many bedrooms do I need/want?
    Any special wants, i.e., pool, deck, large yard, master down, etc.

The list is much longer, so write down any concerns or question you have and discuss them with your REALTOR®. This will cut down the time you spend driving around looking at available properties and allow for a quicker offer on the home you choose.

  Selecting a REALTOR®

Now you are ready to work with a REALTOR®. You know what you want and how much you want to spend. You have been looking around and have seen several available listings. One or more may seem just right for you. Now is the time to choose a REALTOR®.

If you wish to meet and talk with me, either call (210) 273-9082 (cell) or email me. Bring all of your paperwork with you when you first meet the REALTOR® and be prepared to sign several forms.

The first form is the Information About Brokerage Services which explains the relationship between you and your REALTOR®‘s brokerage. This form is required by Texas law. Read it with care to make sure you understand everything about your relationship with the REALTOR®, the Broker and you.

The next form to sign is the buyer/tenant representative agreement. This is the contract between you (you are the client or buyer)  and the brokerage/agent and it allows the agent to work for you. The agreement covers a  specific time period and such things as how the agent is paid and the requirements of the agent/brokerage and the client(s)(buyer(s)). This makes the REALTOR® your  representative and (s)he must represent your best interests all the time. Takes  a lot of the worry and pressure off of you.

Now your agent will arrange for you to view homes in person and assist you to make to a decision. Your agent will discuss the terms and conditions of the offer (also a contract to purchase) you are about to sign. There are some items you should be aware of in a real estate contract before you see one for the first time.

1. Option Period – This provides a set period of time to terminate the contract with no penalty for you. However, this does cost money–rule of thumb $5-10 per day of the option period.   This time allows you to have the home inspected to identify most issues with the home. These could  be minor items such as cracks, nicks and dings to major things like a cracked foundation or  active insect infestation (also called a WDI (Wood Destroying Insect) inspection). A smart  REALTOR® will recommend you get a home inspection. Generally home inspections cost around $375 and may be well worth it down the line.

2. Home warranty plan – This is a one year warranty plan typically written into the contract that provides protection for the buyer. For instance, should something happen to the hot water heater in the first year after purchase of the home, the plan should cover the replacement.  You, the buyer would only be responsible for a service charge in some, not all calls for service. Not all plans are the same. Discuss  this option with your REALTOR®.

3. Earnest money – This is good faith money held at the title company and consummates the contract. This money is typically returned to the Veteran buyer at the close of sale unless  they exceed their buyers expenses. If the during the Option you decide to cancel the deal, it  is returned to you.

4. Buyers’ expenses – Buyer expenses are the amount the seller will pay on your behalf. This  covers a wide range of expenses and is a key part of the contract process. Because these expenses vary, we can not go into them here. Be certain to ask your agent what  expenses you can expect and if you should anticipate bringing money to closing.

5. Closing date – The last thing is the closing date. If you have your financing in place, the date could be as little as two weeks, however in most cases one month plus is more likely.

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 NOTE: I am not a lawyer and I am not giving legal advice by sharing with you some items found  on a real estate contract.   Please seek legal advice if you have a specific question. Mr. Weber is one of the leading real estate attorneys in San Antonio and easy to work with.

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  Working with the Title Company

After the contract is executed, it is goes to the title company where receipt of the Earnest money and Option period money for the closing of the transaction is done. Once the title company receives the contract they order a title commitment. This insures the buyer and the lender that there are no problems with the title of the home that may cause problems later.

They also order payoff information, check on buyers insurance, confirm the survey is accurate, and also make sure that lender-required repairs are completed prior to closing.

Now comes the issues like the WDI or termite inspection, survey, property appraisal, and homeowner insurance are all confirmed. The only item that takes time from you, the buyer, is insurance.

The survey is a very important document that details your property lines and limits on it which will show how  the house fits on your lot. It will also detail any easements, which are right of ways for the  city.

The Wood Destroying Insect (WDI) or termite inspection ensures your home does not have a termite infestation destroying your home.

The appraisal is a document that gives you the current worth of your home which the lending institution uses to guarantee that you are not paying too much.

When the day comes for closing, be prepared to sign papers for about 30-45 minutes. The whole  process is straightforward. The escrow agent at the title company will explain everything to you,  as required by law. If I am your agent, I will be at the table for support and to also  answer questions if required. My motto is “Personal, professional service.” So you see, it is a process many have gone through and survived…much like basic training or boot camp!

If you will allow me to be your REALTOR® it will be my honor and pleasure to assist a fellow veteran to achieve the home of your dreams. Please contact me today!

Thank you for your service to our Nation