Are you a veteran thinking about buying a home in Eugene? As a veteran, you have access to terrific financing opportunities through VA loans that can make purchasing a Eugene home a very achievable goal. Keep reading for more on how you can use a VA loan to become a homeowner in Lane County.
What are VA Loans?
VA loans are home loans for Veterans of the United States Military. Veterans don’t receive home loans directly from the federal government. Instead, the Department of Veterans Affairs guarantees the loan to private lenders so they won’t lose out if a borrower defaults on the VA loan. The federal government backing makes it easier for veterans to obtain a home loan.
Why are VA Loans an Outstanding Option?
In a crowded field of home mortgage options, a VA home loan stands out as an excellent financing opportunity. Along with the fact that lenders make it easier to obtain a VA home loan, there are significant benefits to using a VA loan to buy your next home. The exciting features include:
- Accepts lower than average minimum credit score (varies with the lender)
- No private mortgage insurance requirement
- Zero-down-payment required
- Favorable interest rates
VA Home Loan Eligibility
Are you eligible to apply for a VA loan? Before we go any further, let’s take a look at the loan application requirements. Although the VA loans have the United States Department of Veterans Affairs backing, it’s important to note that you’ll need to meet some requirements.
As a veteran, you’re eligible to apply for a VA loan if:
- You meet the minimum length of service
- You weren’t dishonorably discharged
Certificate of Eligibility
You’ll need to provide a Certificate of Eligibility (COE) to apply for a VA loan. The Department of Veterans Affairs issues the COE to assure your lender that you are eligible for a VA home loan. As a veteran, you’ll need to provide your DD-214 form to receive the COE.
You can do this online or through your lender.
Putting Your Eligibility Into Action
Securing a Certificate of Eligibility for your loan is an essential first step in your home buying process. The next step is to locate a lender to finance your loan.
Expect to fill out paperwork and produce evidence that shows that you can afford the mortgage. Your lender will want to review such things as
- Pay stubsW2 forms
- Pension information
- Bank statements
Your Credit Score Matters
Along with all of the financial information that you provide, your lender also relies on your credit to determine if you are a credit risk. A credit score, also known as a FICO score, is a number assigned by a credit reporting bureau that reflects your current credit status. Scores range from 300 to 850, and high numbers show that the borrower has an excellent credit history.
A significant benefit of the VA loan is that you won’t need an immaculate credit rating to get a mortgage. Although there is technically no minimum credit score, your lender is likely looking for a minimum credit score of somewhere between 580 and 620.
How Much Money Can You Borrow
Your lender determines how much money to loan you through a series of underwriting decisions based on your financial situation. Therefore, the amount of money that you can borrow for a home depends on the maximum set amount and your ability to repay a home loan.
Keep in mind that you aren’t obligated to take out a mortgage for the maximum amount of money that you can borrow. Examine every facet of your monthly family budget before you commit to a mortgage. Your mortgage payment should fit comfortably into your monthly income so that you’ll have the funds necessary to enjoy your life in Eugene.
Choosing a Home
Once you know your housing budget, we suggest that you start working with an experienced real estate agent to navigate the housing market in our area. Although the Register-Guard noted that the housing market is slightly less competitive now than it was for much of 2018, you’ll still benefit from the negotiating skills of an expert real estate professional to help you purchase a fantastic home in Eugene.
It’s a good idea to pick a real estate agent who regularly works with veterans. A reason for this is because unlike a conventional home loan, any property that you want to buy must meet a list of Minimum Property Requirements (MPRs) to qualify for VA financing. The home must go through a stringent appraisal to make sure that it is in move-in condition and meets all of the MPRs. A real estate agent who knows about MPRs is a worthy guide in the homebuying process.
The Minimum Property Requirements are in place to protect veterans from unwittingly purchasing an unsound house. It is possible, however, to use a VA home loan to buy a property that needs some cosmetic fixes. If you’re considering purchasing a cosmetically challenged home, it’s worthwhile to ask your lender about adding a VA renovation loan onto your original VA loan.
Contact us Today
Lastly, taking out a VA loan in Eugene is a fantastic way to build equity in a great town. With exciting perks like:
- Low minimum credit score
- Zero down payment
- No private mortgage insurance requirement
- Competitive interest rates
At Strategic Mortgage Solutions, we specialize in matching each client with a loan that meets their budget goals.
Contact us today, and we’ll help you figure out if a VA loan can help you to put down the welcome mat at your new home in no time.