HOME BUYING HICCUPS VETERANS SHOULD AVOID

1. HOME BUYING HICCUPS VETERANS SHOULD AVOID Not so long ago, buying a home for a veteran seemed like an impossible dream due to the strict requirements of lending institutions. VA loans have, however, changed the landscape of home buying for veterans. A VA loan can be used for buying a first home, refinancing or taking out a second mortgage. The fact that VA loans offer flexibility for applicants and come with some benefits has increased the popularity of the products. However, as with any other loan type, some issues may arise and it’s best to know about them beforehand. CREDIT SCORE As much as a VA loan is a flexible product, lenders still need applicants to meet a minimum credit score. To avoid confusion, an applicant should know that the Department of Veteran Affairs does not set credit score minimums in the same way it does not provide loan products. A majority of lenders offering VA loans will ask for a 620-minimum credit score which is by far lower than that needed when applying for a conventional or even an FHA loan. However, it can be hard for a veteran to meet the score due to several extenuating circumstances. Before applying for a VA loan, you should find ways to raise it to the required levels. SUITABLE HELP Getting through the intricacies of a VA loan application from the appraisal to finding a suitable loan size to an appropriate home can be challenging. Hiring a real estate agent will serve as an advantage. However, you should know that some agents are better versed in VA loans than others, so pick one with caution. APPRAISALS The VA has minimum property requirements that have to be met during an appraisal which is one process that may present an obstacle when applying for a VA loan. A home that is not move-in

2. ready is very bad news. However, some MPR can be amended to make a home ready for use. Start by getting a full report from an appraiser and learning about the repairs necessary then consult with a loan officer and real estate agent about what to do. OCCUPANCY Another hurdle that may come up when applying for a VA loan is occupancy. One guarantee of the VA loan is that the home you purchase should act as your primary residence. A problem may arise when you have to move to a new station, perhaps permanently. There is a loophole, though – there is no restriction against renting a property. It means that after you have occupied your new home, renting it out is a viable option when a change of station is permanent. RESIDUAL INCOME REQUIREMENTS VA loans are beneficial for veterans because they don’t demand down payments. Another plus point is that they come attached with a residual income requirement, which is meant to increase the affordability of homes for veterans. The motivation behind this standard is to ensure that after buying a home, a veteran has enough income left for their daily needs. You may find that you don’t meet the residual income guidelines when applying for a VA loan. You can solve that by lowering the loan amount to correspond to the guidelines. Another one is to consider alternative income options that you can use to discount some part of your residual income.