Georgia home prices are up year over year, and mortgage rates remain high. With no signs of slowing down, many wonder how they will ever achieve their dream of homeownership.
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That’s where VA loans come in. For military servicemembers, they can completely change the game, making it possible to find a place to call home. Navigating the VA loan process in Georgia doesn’t have to be complex, so let’s go over some tips and tricks to help you make the most of your VA benefits and learn how VA loans work.
Before You Apply for a VA Home Loan: Preparing for Success
Before applying for a VA loan, there are steps you can take to set yourself up for success and make the process as seamless as possible.
Know Your Eligibility Requirements
VA loans are available for active duty service members, veterans, and surviving spouses of all branches of the U.S. military. An active military member must have served at least 90 days to qualify. An eligible veteran must have been honorably discharged from active duty and served at least 24 continuous months.
The home you want to purchase must be your primary residence. To verify loan eligibility, you will need to get a certificate of eligibility (COE).
Improve Your Credit Score
A VA home loan does not require a minimum credit score, which can make buying a home more accessible. However, it still impacts your interest rates and loan terms because you need credit approval. It’s critical you do what you can to improve your score beforehand.
- Check your credit report for mistakes and contest them to boost your score;
- Don’t open new accounts. Each hard inquiry can take up to 5 points off your score;
- Become an authorized user to increase your available credit utilization.;
- Make on-time payments and pay down your revolving account balances.
Private lenders have different credit score requirements, but these tips are a great place to start.
Save for Closing Costs
Like a conventional loan, you will have closing costs to purchase your home, including specific VA loan requirements. These fees could include origination fees, appraisal and inspection fees, and the VA funding fee.
You should budget for at least 3 to 5 percent of your total home purchase to pay closing costs. There are many down payment assistance programs that provide loans to help you pay your down payment and closing costs if needed.
Understand Your Loan Options
Typically, you will choose one of three types of VA loans:
- Purchase loans to help you buy a home, build a new one, or improve your existing home.;
- Cash-out refinance loans to take money out of your home equity or refinance your loan into a VA-backed one;
- Interest rate reduction refinance loans to reduce your current mortgage payments.
What you intend to do with the loan can determine which is best for you. Different VA loan limits are available. A loan officer can help you navigate your options.
Maximizing Your VA Loan Benefits: Georgia
You can maximize your VA loan benefits in Georgia by taking advantage of the following elements.
No Down Payment: Taking Advantage of 100% Financing
No down payment is the biggest VA home loan benefit. As long as the house appraises for more than or equal to what you’re purchasing it for, you do not need to make a down payment. You can keep your savings nest egg for a rainy day or for other expenses for your new home.
No Private Mortgage Insurance (PMI): Significant Savings
Unless you’re putting 20 percent down, a non-VA loan will require you to get PMI. This is not the case when it comes to Georgia VA mortgage programs. Because they are government-backed loans, PMI is not necessary, which significantly saves on your monthly payment.
Competitive Interest Rates: Finding the Best Deal
VA loans may carry a lower interest rate in general, but you’ll still want to shop around. Many brokers can pull rates from different banks, so you know you’re getting a competitive rate. Your exact terms will depend on your personal finances, current market rate, and more.
Closing Cost Limitations: Reducing Upfront Expenses
A VA loan often has fewer closing costs, which is another way to reduce your upfront cost. Keep in mind that there is a 4 percent limit on seller concessions, which are costs you can negotiate for the seller to pay.
You can also utilize lender credits, though this will increase your interest rate. On the other hand, you can purchase discount points to lower the interest rate. Typically, each discount costs 1 percent of the total loan amount, and it could decrease your interest rate by 0.25 percent. Your mortgage lender can help you understand what closing cost options are best for you.
Funding Fee: Understanding and Managing This Unique Cost
The funding fee is unique to the VA loan program, and how much you pay will depend on a variety of factors. If you cannot pay the funding fee outright, you can roll it into the terms of your loan. There are some exemptions, including for a disabled veteran and surviving spouse. It will be noted on your certificate of eligibility if you are required to pay the funding fee.
Additional Tips and Tricks on VA Loans for Georgia Veterans
There are some additional resources available to you when it comes to Georgia VA loans, including:
- The Georgia Dream Homeownership Program, through the Department of Community Affairs, strives to make housing more affordable. It offers three programs: the Georgia Dream Program, Peach Plus, and Peach Select Veteran Assistance.
- Georgia extends exemptions on property taxes for honorably discharged disabled veterans. Thanks to these tax exemptions, you will not be hit by a large bill at the end of the year.
- VA regional loan centers and veterans services organizations can help you understand more about your options and VA eligibility, answering any questions for qualified applicants.
If you’re not sure where to start with your loan program, the Georgia Department of Veterans Affairs can help point you in the right direction.
Conclusion
You have options when it comes to finding the right VA home loans, and once you’re ready to find the perfect home, District Lending can help. With District Lending, everything is transparent. We want to help you find a favorable rate and utilize your full VA loan entitlement. So what are you waiting for? Reach out to info@districtlending.com or call (800) 460-6481 to get started today!
