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Best Practices for the VA Loan Process

VA Loan Best Practices

VA Loan Best Practices

If you are an active service member, spouse, or dependent, the chances are great that you have heard of VA Loans. You may have even looked into them or read about them somewhere on the internet. Awhile back, we published an article explaining why you should consider using this fantastic military benefit to purchase your next home. Today, I’d like to offer some further insights into this benefit and offer you some VA Loan best practices when using this benefit that you’ve earned.

Determine Your Home Needs

It is important to understand first that not all vendors are equal when it comes to using your VA loan benefit. When looking for a vendor, first identify the type of home you are looking to buy or build. Some vendors specialize in the purchase of a condominium and do not deal with manufactured homes. Some vendors are willing to lend for new home builds, while others do not. So, identifying what you want is step one.

RELATED: Preparing to Purchase a Home as a Military Family

 

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VA Loan Purchase, My Story

When we purchased our first home, a new build, in 2008, I used my VA loan through our bank, USAA. The process, while longer than we expected as first-time homebuyers, was pretty straight forward. We got a good rate and I think that was because USAA does a lot of business in home loans. They are a large and well established bank.

By contrast, we just purchased a home in northern Virginia a few months ago. Our first stop was USAA because we have a very long history of banking with them. While they gave us a rate better than the last one, we shopped around and found a local bank that was able to beat USAA’s rate. Because USAA was larger, they did not have the flexibility to match the rate of the smaller lender.

When you do find a vendor that suits your home buying needs, make sure you ask them how many VA loans they’ve processed and handled in the past. Some banks do not like to deal with VA loans because they feel the gateway to becoming a qualified buyer, i.e. your Certificate of Eligibility, is lower and therefore more risky. My wife and I have encountered that before.

The Realtor

An easy solution to this problem is using the right realtor. We’ve used realtors for both of our home purchases, and I can not tell you enough how valuable their expertise comes in, especially when dealing with lenders.

In our story above, where one of the lenders we contacted refused to work with VA loans, our realtor gave us a list of local lenders he had dealt with in the past that were friendly to the VA loan option. We were already approved by USAA, so shopping around was not going to hurt us.

It was one of the lenders from his list that we ultimately used to finance our home. We would not have considered them because they are a smaller financial institution from this area. It was a pleasant surprise to learn that they preferred the VA loans to other traditional finance options.

Need a Lender?

If you are looking for a lender, here are some that have a solid history working with the military community to maximize your VA loan benefit.

 

>> You may be eligible for a zero down VA home loan?  For a no-obligation, free consultation regarding your VA Loan eligibility, please go here.

 

  1. USAA – I’ve mentioned above that USAA is our go-to financial institution for almost all of our banking needs. They have a streamlined process that allows you to get pre-approved online, and they assign you a loan officer that stays with you throughout the entire process. For VA loans, they offer a 15 and 30-year option, as well as a 30-year VA Jumbo loan for financing amounts larger than $510,400.
  2. Pentagon Federal Credit Union – This is another bank that is extremely popular within the military community, and for good reason. They also offer the standard 15/30-year VA loan, but they also highlight 15-year Fixed Rate Conforming loan, which offers a fixed-rate and 97% financing for first-time homebuyers. This loan adds the benefit of a faster payoff with predictable payments.
  3. Navy Federal Credit Union – I’m not a Navy guy, but I am impressed with this financial institution. Like the other two,