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How Much Home Can I Afford?
Typically, as a first-time homebuyer, the first question we ask ourselves is "What can I afford?" There are several factors that determine what a reasonable mortgage payment should be for an individual, including annual income, existing debt payments, down payment (if any), as well as additional costs like homeowners insurance and housing association fees. Veteran First Realty provides a handy VA Loan Payment Calculator to help homebuyers find a monthly payment that's comfortable for them, on behalf of CrossCountry Mortgage.
What Type of Loan Should I Get?
There are many financing options available for the veteran first-time homebuyer out there, each with their own unique advantages. For most veteran and active-duty military members, we at Veteran First Realty highly recommend the federally-backed VA Loan due to its distinct benefits over traditional loans.
Advantages of a VA Loan:
First-Time Home Buyer Gold. No Down Payment Necessary.
Homebuyers will usually need at least a 3 percent down payment for conventional loans or a 3.5 percent down payment for FHA financing. On a $200,000 loan, that's $10,000 for conventional borrowers and $7,000 for FHA. For many first-time homebuyers, coming up with that kind of cash up can be challenging. Being able to purchase with $0 down means VA borrowers don't have to spend years saving to scrape together a big down payment.
Less Stringent Qualifications.
Many first-time homebuyers might not yet have a strong credit history, which can make it more difficult to get approval for a mortgage or qualify for an affordable interest rate. Since the VA Loan is government-backed, VA Loans are easier to qualify for at competitive rates.
Lower Monthly Payments.
Since VA Loans don't require the added monthly expense of private mortgage insurance (PMI), they tend to leave more money in your pocket each month. In addition, the competitive VA Loan rates can save a typical buyer thousands over the lifespan of the loan.
The first step toward securing your loan is getting preapproved. This involves a prequalification process, where a loan officer assesses the homebuyer's financial situation and determines what they qualify for, and is followed by the homebuyer submitting a completed loan application to the lender for approval. Start your preapproval now.
Finding a Real Estate Agent
When using a VA Loan, it's important to find a real estate agent that not only knows the intricacies of the VA Benefit Program but also understands the specific needs of veterans and active-duty military members. Veterans United has put together a nationwide network of military-friendly real estate agents for just this purpose.