By Elisa Cotton
If you’re a veteran or currently active duty and dreaming of owning a home, the VA Home Loan program can be a fantastic opportunity to turn that dream into a reality. However, before embarking on this exciting journey, it’s essential to understand the financial aspects involved.
When applying for a VA Home Loan, certain costs are involved, but they are typically more affordable than traditional loans. First you will need to consider your earnest money. This is the money that you will use to secure the home so that the seller is comfortable accepting your offer and taking the home off the market. You should be getting all earnest money refunded to you at closing. In addition to the earnest money, you will want to make sure that you have money for a home inspection. You will want to keep your receipt and proof that you paid this fee so that the lender is able to give you credit for this and get your money refunded at closing as well.
Working with a real estate agent who knows the ins and outs of a VA home loan is important. They will be able to negotiate closing costs for you so that the seller is paying for all closing costs, and you aren’t bringing more money in at closing. The goal is to get back all funds that you have deposited at closing so that the VA home loan is truly a no cost program for you the veteran.
In addition, you will want to be aware of the funding fee, a one-time payment required by the VA that helps sustain the program for future veterans. The amount varies depending on your military service, down payment size, and whether it’s your first or subsequent use of the VA loan benefit. If you have a VA disability of 10% or more this fee should typically be waived. The VA funding fee is wrapped into your home loan and that amount is added onto the sales price. This is not a fee that you will be paying out of pocket for. The VA Home Loan does not require a down payment or monthly private mortgage insurance, saving you significant upfront costs.
By understanding the money you’ll need for a VA Home Loan, you can confidently take the first steps toward homeownership, knowing that the financial benefits for veterans can make your dreams come true without burdening your budget. Call us today to get personalized guidance on your unique situation and make the most of this fantastic opportunity to purchase your dream home today.