
If you’ve served or are currently serving in the military, you’re likely eligible for VA home loans – a loan type packed with significant advantages like forgiving credit requirements, zero down payment, and no need for private mortgage insurance. Let’s examine if VA home loans could be the right path for you when purchasing a house in Columbus, Ohio.
Insight into VA Home Loans
A VA home loan, backed by the U.S. Department of Veterans Affairs, aids service members in purchasing a home under favorable conditions. If you’re contemplating using a VA home loan to buy a house in Columbus, Ohio, remember the prerequisites include meeting income and credit criteria and possessing a valid Certificate of Eligibility (COE). Eligibility may extend to:
- Veterans
- Active-duty personnel
- National Guard members
- Reserve members
- Surviving spouses
Benefits of Opting for VA Home Loans
Consider these impressive benefits if you’re eyeing a VA home loan for your home purchase.
Government Assurance
The VA ensures a portion of the loan, reducing the risk to lenders and fostering more attractive rates and terms. However, it’s crucial to remember that the government doesn’t lend the funds. You secure the financing from a private mortgage lender, similar to a conventional loan.
Zero Down-payment Obligation
A significant perk of VA home loans is that qualified buyers typically don’t need to make a down payment and can finance 100% of their primary home’s value.
Absence of Private Mortgage Insurance (PMI)
VA home loans eliminate the need for PMI, even if you put less than 20% down. This can lead to substantial monthly savings compared to conventional loans.
Liberal Credit Parameters
Since VA backing diminishes the lender’s risk, they can offer more lenient credit terms. While credit scores of 620 or above are typically preferred, VA loans are more forgiving of previous financial missteps such as bankruptcies or foreclosures than conventional loans.
Downsides to VA Home Loans
While the pros of VA home loans are substantial, some cons to be aware of include:
Compulsory Funding Fee
The VA imposes a mandatory funding fee on every VA purchase loan or refinance to offset potential losses from loan defaults. This fee can be financed in addition to your loan amount and is typically included as a closing cost.
Mandatory VA Appraisal
While mostly a minor inconvenience, the mandatory VA appraisal can take over three weeks, and sometimes longer, depending on the state. If you’re buying a house in Columbus, Ohio, consulting with a local agent can help clarify the timeline for a VA appraisal.
Steps to Buying a House with a VA Home Loan in Columbus, Ohio
The process is relatively similar to other home purchases. Here’s a breakdown:
Prequalification: Start by finding a VA lender and prequalify to get an idea of your purchasing power based on your financial status. This sets the stage for the crucial step of VA loan preapproval.
Pre-approval: This affirms your borrowing capacity and makes you a credible buyer in the eyes of sellers.
Offer and negotiation: Once you’ve found an ideal home that’s approved for a VA loan, it’s time to make an offer and negotiate a contract with the seller.
VA appraisal and underwriting: Concurrent with the VA appraisal, underwriters will review your income, financial documents, and the finalized appraisal. Once everything checks out, you’ll get the green light to close the deal.
Closing: Once all documentation is signed, the keys to your new home are yours.
Leverage the Expertise of a Columbus Agent for Your VA Home Loan
While similar to a conventional loan purchase, using a VA home loan involves unique considerations. Partnering with an agent who is well-versed in VA loans and their intricacies can make a world of difference. If you’re considering buying a house in Columbus, Ohio with a VA home loan, don’t hesitate to get in touch with us here at the Goldsmith Team.