Welcome to San Diego Blog | August 15, 2017
Why Every Veteran Should Use Their VA Loan
The VA home loan is an amazing benefit that our Veterans have so greatly earned. Unfortunately, when we Veteran’s hear “VA” we automatically assume that the process is going to be very long and tedious, but that couldn’t be further from the truth.
I remember returning from my first overseas assignment when I was 24 and looking into where I was going to live. I was looking at rentals, but just couldn’t get over how expensive it was to rent and pay someone else’s mortgage. I was interested in homeownership and had briefly heard of the VA loan, but wasn’t really familiar with it. The actual thought of homeownership at such a young age seemed realistically a little far fetched and was probably outside of my grip at that point. Fast forward a few months and I was getting the keys to the first condo I owned.
If you’re a Veteran who hasn’t used your VA home loan, here are a few reasons why you should:
Zero Money Down
That’s right, zero money down on a purchase just over $612,000 here in San Diego currently. Much of the population strives to save money to purchase a home with around 20% down, which can be very taxing, especially as a young adult. But with the VA home loan, you’re afforded the opportunity to purchase a home and not spend your hard-earned savings, allowing you to focus that money towards other things or just keep saving it for a rainy day.
No Private Mortgage Insurance
Private Mortgage Insurance, or PMI is something that’s a reality of almost every other home loan, and it is generally several hundred dollars a month that’s paid with your monthly mortgage payment. But with the VA home loan, the VA is essentially guaranteeing your loan to the lender, so you’re not required to pay any PMI over the course of the life of your loan, which saves you a few thousand dollars a year more than the conventional buyer!
Easier Credit Requirements
Since the loan is guaranteed by the VA, most lenders have slightly easier credit requirements for the loan. Don’t have perfect credit? Talk with a lender and see if you qualify. The worst answer you can get is a temporary no with steps moving forward on how to improve your credit so you can take advantage of this incredible benefit.
Build Equity Instead of Paying Rent
You’re always going to pay for housing, be it on post housing, where you don’t get to collect your housing allowance because it’s automatically being put towards rent for the base house, or if you’re collecting your housing allowance paying rent off post. But think of it this way, you’re always paying someone’s mortgage, and building their equity for them. In fact, you’re paying for more than that, just last year in San Diego it cost an average of 33% more to rent than it did to purchase the same quality of property and pay a mortgage on it. With rent, not only are you paying someone else’s mortgage, you’re not building equity, and you’re letting someone else siphon an extra 33% overcharge off of your account every month. If you buy, you’re building equity for yourself, paying down your own mortgage, and paying less than the average rent for the same property. Sounds like a major win/win.
Let’s not forget tax benefits as well. Do you dread tax season? Most of us do, but what if you could write off the interest on what your mortgage loan, and get money back at the end of the year? It might make the visit with Mr. Tax Man a little more appealing. When you own a home, that’s exactly what you can do. With rent, you’re getting zero benefit from that money, it is for all intents and purposes vanishing into thin air.
How to Get Started
First of all, it’s very important that you work with an agent and lender who are very familiar with the VA buying process. A lot of my VA clients want to live downtown, and purchase a condo instead of a single-family-home, and who could blame them? It is America’s Finest City after all. But not every building has gone through the VA approval process, so it’s important that your agent is familiar with the buildings, the specific Home Owner’s Association’s and condo litigation, which isn’t something that a part-time or novice agent would necessarily be able to navigate.
Don’t know of a good VA lender? No worries. Most agents who are well versed in the VA purchasing process have lenders that they’ve worked with on many of these transactions, and can give you a referral. If you already know a good VA lender yourself that you would prefer to work with, the choice is solely yours. Just let your agent know, do an introduction, and they’ll bridge the gap to communicate directly with your lender.
Congratulations on taking the first step towards learning how to use your VA home loan! It really is an incredible benefit that you’ve earned. You protect our freedom and make sure that we can sleep peacefully here on the Homefront, and you deserve to own a piece of what you’ve worked hard to defend. Buying a home is one of the most exciting purchases you’ll make in your life, so you need to make sure you’re properly represented to ensure the process goes smoothly, and above all else, that you have fun because you’ve earned it!
If you found this information useful, please be sure to share it with your friends, and if you have any questions, please direct message me at Sarah@welcometosandiego.com or give me a call at 619-320-1647. I would love to help you start investing in your future.
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