home inspections Archives - Page 5 of 10

down payment. Find out how much you should budget using a home loan affordability calculator and figure out how to save the amount you need. After all, the best way to save for a house is to formulate a budget that helps you work towards your house saving goals step by step. Soon enough, you’ll be turning the key and stepping into a home you love.

Step 1: Calculate Your Down Payment and Timeline

When figuring out how to save for a house, you may already have a savings goal and deadline in mind. For instance, you may want to save 20 percent of your home loan cost by the end of the year. If you haven’t given this much thought, sit down and crunch the numbers. Ask yourself the following questions:

What is your ideal home cost?
What percentage would you like to contribute as a down payment?
What are your ideal monthly payments?
When would you like to purchase your home?
How long would you like your term mortgage to be?

Asking yourself these questions will reveal a realistic budget, timeline, and savings goal to work towards. For instance, say you want to buy a $250,000 house with a 20 percent down payment at a 30-year loan term length. You would need to save $50,000 as a down payment; at a 3.5 percent interest rate, your monthly payments would come out to be $898.

Step 2: Budget for the Extra Expenses

Just like a new rental, your home will have fees, taxes, and utilities that need to be budgeted for. Homeowners insurance, closing costs, and property taxes are a few examples of cash expenses. Not to mention, the cost of utilities, repairs, renovation work, and furniture. Here are a few more expenses you may have to save for:

Appraisal costs: Appraisals assess the home’s value and are usually ordered by your mortgage lender. They can cost anywhere from $312 to $405 for a single-family home.
Home inspection: A home inspection typically costs $279 to $399 for a single-family home. Prices vary depending on what you need inspected and how thorough you want the report to be. For instance, if you want an expert to look at your foundation, there will likely be an additional cost.
Realtor fees: In some states, the realtor fee is 5.45 percent of the home’s purchase price. Depending on the market, the seller might pay for your realtor fee. In other places, it might be more common to contract a lawyer to look over your purchase agreement, which is usually cheaper than a realtor.
Appraisal and closing costs: Appraisals assess the home’s value and are usually ordered by your mortgage lender. They can cost anywhere between $300 and $400 for a single-family home.

Step 3: Maximize Your Savings Contributions

Saving for a new home is easier said than done. To stay on track, first create a savings account that has a high yield if possible. Then, check in on your monthly savings goal to set up automatic contributions. By setting up automatic savings payments, you may treat this payment as a regular monthly expense.

In addition to saving more, spend less. Evaluate your budget to see what areas you could cut down or live without. For instance, creating your own workout studio at home could save you $200 a month on a gym class membership.

Step 4: Work Hard for a Raise

One of the best ways to boost your savings is to increase your earnings. If you already have a job you love, put in the extra time and effort to earn a raise. Learning new skills by attending in-person or virtual training seminars or learning a new language could increase your earning potential. Not only could you land a raise, but you could add these skills to your resume.

Sometimes, putting in the extra effort doesn’t always land you a raise, and that’s okay! When getting a raise is out of the question, consider looking at other opportunities. Figure out which industry suits you and your skillset and start applying. You may end up finding your dream job, along with your desired pay.

Step 5: Create More Streams of Income

Establishing different income streams could help your house savings budget. If one source of income unexpectedly goes dry, having other sources to cut the slack is helpful. You won’t have to worry about the sudden income change when paying your monthly mortgage.

For example, creating an online course as a passive income project may earn you only $5 this month. As traffic picks up, your monthly earnings could surpass your monthly income. To create an abundant financial portfolio, there are a few different ways to do so:

Create an online course: Write about something you’re passionate about and share your skills online. Sell your digital products on Etsy or Shopify to earn supplemental income.
Grow a YouTube channel: Start a YouTube channel and share your skills to help others within your industry of expertise. For instance, “How to start a YouTube channel” could be its own hit.
Invest in low-risk investments: From CD’s to money market funds, there are a few types of investments that could grow your cash with low risk.

Step 6: Pay Off Your Biggest Debts

Before taking on more debt like a mortgage, it’s important to free up your credit usage. Credit utilization is the percentage of available credit you have open compared to what you have used. If you have $200 in debt, but $1,000 available on your credit card, you’re only using 20 percent of your credit utilization. A higher credit utilization could potentially hinder your credit score over time. Not only can paying off debts feel satisfying, but it could also increase your credit score and prepare you for this next big purchase.

To pay off your debts, create an action plan. Write out all your debt accounts, how much you still owe, and their payment due dates. From there, start increasing your payments on your smallest debt. Once you pay off your smallest debt in full, you may feel more motivated to pay off your next debt account. Keep up with these good habits as you take on your mortgage account.

Step 7: Don’t Be Afraid to Ask For Help

Whether your touring homes or want help adjusting your budget, don’t hesitate to ask for help. If you’re trying to figure out what your budget should look like, research budgeting apps like Mint to build a successful financial plan.

If you’re curious about additional mortgage expenses, your budget, or investment opportunities, reach out to a trusted professional or utilize government resources. Not only are they able to help you prepare for your next big step, but they could also help you and your finances in the long term.

Step 8: Store Your Savings in a High Yield Saving Account

While you may have a perfect budget and a home savings goal, it’s time to make every dollar count. Before you add to your account, research different savings accounts and their monthly yields. The higher the yield, the more your savings could grow as long as your account is open.

In September of 2020, the national average interest rate on savings accounts was capped at 0.8 percent. If you were to deposit only $100 into a high yield savings account with an APY of 0.8 percent, you could earn $80 off your investment over the year. This helps you save extra money by just putting your money into a savings account.

In Summary

First, set a savings goal to match your estimated down payment and mortgage monthly payments. Then add your contributions to a high yield savings account to grow your money overtime.
Don’t forget to budget for extra mortgage expenses like appraisal costs, home inspections, realtor fees, or closing costs. Keep in mind, your monthly utilities and fees may also be more expensive than your current living situation.
Prepare for the additional costs by increasing your earning potential and optimizing additional income stream opportunities.
Free up your credit utilization by paying off as much debt as possible before buying a house. Keep up these good habits throughout the length of your mortgage term.

When you purchase a home, you’re building a piggy bank for your future. Every month you pay your mortgage, you pay part of it to yourself because you own the home. Instead of paying rent to someone else, you reap your own investment when you sell. Most importantly, though, you’ll have a place that’s truly your own.

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Apache is functioning normally

May 8, 2023 by Brett Tams

Woo hoo! You’re finally ready to look for that “starter” cottage or maybe there’s a condo that’s caught your eye. Buying your first home is exciting, but it can also be confusing and stressful. Homie de-mystifies the home-buying process, automates many of the steps, and makes buying a home without a real estate agent a reality. Here’s how it works.

How much can you afford?

How do you calculate how much you can afford to spend on your home? A good rule of thumb is to spend no more than 28 percent of your monthly gross income on your mortgage (the bank won’t let you go much higher than that anyway).

What does that mean? Let’s say you make $55,000 a year, that’s $4,583 gross monthly and puts your 28-percent mortgage at $1,283. Depending on your interest rate, your terms, and how much you put down, you could buy a house or condo between $250,000–$300,000. Keep in mind that your mortgage payment will just part of the overall monthly cost of a home; you’ll also need to cover taxes and insurance.

Now, how does that compare to renting. Average rent costs in Salt Lake City are expected to hit $1,520 per month this summer–$237 more than your hypothetical mortgage payment. Additionally, the 2016 Home Price Expectations Survey predicts Utah home prices will increase in value 10–30 percent in the next five years. Buying now could earn you some sweet equity in just a few short years.

Get pre-qualified

You can get pre-qualified in just a few minutes–without having to put your hands on a single pay stub. Once you’re pre-qualified, our online, step-by-step platform will walk you through gathering the information needed to go from pre-qualified to pre-approved, and then through underwriting. Here’s a look at what you’ll need:

Pay stubs
Bank account statements
W-2s
Tax returns for the past two years
Statements from current loans and credit lines
Names and addresses of your landlords for the past two years.

Remember your credit score will affect your borrowing power and influence the interest rate on your home loan. For ways to give your credit score a hefty boost, read this blog post.

Stop saving

If you’re still saving up for a 20% down payment, stop. Dozens of loan options exist for 0–5% down and you’d be wise to buy sooner rather than later, even if it means paying extra in mortgage insurance for the first few years.

Let the hunt begin

Now that you know what you can afford, you’ve got to find it. Luckily, you only need to look in two places:

Create your list of must-haves

Aside from price, everyone has a mental list of what they’d like to have in a home. Use this checklist to help you clarify what you want:

# of bedrooms
# of bathrooms
Square footage
Commute
Garage, carport
Schools
Walkable area
Restaurants, shopping, parks
Neighborhood
Lawn size, sprinkler system
Storage

Remember, you may need to compromise on some of these things in order to find the right first home.

Use Homie to search and tour

Homie is easy to use. Search by city, zip code, or use the map function to explore new areas. Easily cross-reference favorite homes by price, availability, square feet, and number of bed/baths. Once you find a home you’re interested in, Homie’s Tour software lets you set up a tour with any Homie seller online. You can also look at non-Homie houses. Just call the selling agent to view the home, so you know if you’re interested.

Consider a slightly longer drive for more house

Can’t find what you want in downtown Salt Lake or Sandy? You don’t have to go all the way north to Ogden or South to Provo, but it might be worth expanding your search map to find the features you need in a price range you can afford. An extra five-minute drive can really open up your options.

Make an offer

Yay! You’ve found a home that’s within your price range, has the amenities you want, and is in an ideal location, the next step is to place an offer. At Homie, we make it incredibly easy. Our team of legal experts assist with your paperwork to ensure you place a competitive offer. We also offer free home value reports to show you what comparable homes are selling for in the area. Pretty cool, right?

If the offer is accepted, you’ll move to the due diligence stage. If the seller offers a counter offer, Homie will guide you through the best way to proceed.

Get your loan through underwriting

Once you have a signed contract, get that to your mortgage broker ASAP. It usually takes a couple of times through underwriting before you’ve resolved any potential concerns, so leave yourself at least two weeks to accomplish this step prior to your financing deadline.

Manage inspections and appraisal

Home inspections and the bank appraisal protect you the buyer. The inspections give you a few hours alone in the house with a qualified professional who can help you determine whether there’s any hidden problems that might cause concern. You’ll get to take a close look at that paint job, window casings, and appliances. Your inspector will deliver a written report that highlights major and minor concerns. Discuss this report with your Homie attorney if you need to negotiate repairs or changes to your contract.

If the appraisal comes in at or above the sales price in the contract, you’re golden. Sometimes in a hot market, a buyer can make an offer that is actually higher than the appraised value of the house. When this happens, you have multiple options, including re-negotiating the sales price and even walking away from the deal. Discuss your options with your Homie attorney.

Sign your closing docs

When you’re ready to start closing procedures, the closing paperwork will be prepared by your lender and the title company. You and the seller just sign on the dotted line. Easy!

And once you’ve signed the paperwork, and have been handed the keys to your first home, it’s time to bust out your happy dance because you’ll officially be a HOMEOWNER!

Source: homie.com

Apache is functioning normally

May 7, 2023 by Brett Tams

Last Updated on March 29, 2023 by Mark Ferguson

When buying a house, buyers are given a certain amount of time to complete a home inspection. Most people complete some type of inspection when purchasing a home, but is a home inspection always necessary? I have been a Realtor since 2001 and I am also a real estate investor. In my opinion, 95 percent of house buyers should always get a home inspection. There are a few cases when a home inspection is not needed and some cases when not getting a home inspection will actually give you a better chance at getting a great deal on a house. I have not asked for a home inspection for over a year on my own investments.

How does a home inspection work when buying a house?

When buying a home, most buyers are given a chance to get an inspection done on the house before they buy the home. In most states, it is typical for the inspection to occur right after the home goes under contract. Buyers are given a specific amount of time to either inspect the house themselves, have a friend inspect it, a contractor or a professional home inspector check out the home.

Buyers should be allowed to check out everything in a home including the major systems, utilities, and minor cosmetic issues. In some cases like with HUD homes or some REO sellers, the utilities cannot all be turned on. If the pipes on a HUD home do not hold pressure when HUD inspects a house, the buyer will not be allowed to turn on the water for inspections or appraisals (will discuss HUD rules later in the article). In some cases, houses that are in really bad shape may not have the electric or gas turned on if it is not safe to do so. The buyers are usually responsible for ordering and paying for the home inspection and it gives them a chance to ensure the house is in satisfactory condition before they buy the home.

I also made a video on this subject below:

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How much does a home inspection cost?

The cost of a home inspection can vary greatly. Smaller houses are cheaper to inspect and larger houses are more expensive. Costs vary depending on the region of the country you are in and living costs. Different inspectors have different rates as well.

For a rental property, I would buy that is about 2,000 square feet total I can get an inspection done for about $300. On my personal house which is close to 6,000 square feet, the inspection was $600 and the inspector did not even get a chance to look at everything in the home (after 5 hours). I am able to get slightly lower rates because I am a Realtor and there is a chance I might send business to inspectors. As a regular buyer expect to pay a little more than I do.

Besides using an inspector you can also use a contractor to look at home for you. I would be cautious when using contractors because they might tend to underestimate the seriousness of some repairs. If they convince you not to buy a home and they know you will use them to fix it up, they just cost themselves a job. I had a local roofing contractor look at a flip for me last year where there were major structural problems in the roof. He said it looked like an easy fix and not to worry about it. After he got started on the job, the easy fix turned into almost a complete rebuild of the roof!

What happens to the earnest money if a contract is canceled due to a home inspection?

When you write a contract to buy a home or your real estate agent writes a contract for you, you usually include earnest money. A typical amount for earnest money is one percent of the purchase price, but it can vary depending on your location and the seller. The earnest money is a good faith deposit showing the buyer is serious about buying the home. However, that does not mean the earnest money is nonrefundable if the buyer backs out.

Most contracts are written so that the buyer can cancel the contract and get their earnest money back if certain things happen. If a buyer has an inspection contingency written into the contract, they have a certain amount of time to complete an inspection. If the buyers cancel their contract because of the inspection and they notify the seller before their inspection contingency expires, they will receive their earnest money back most of the time (HUD is an exception I will go into more detail later).

If a buyer is not able to get a loan, there is a title problem or another contingency allows the buyers to cancel (title, appraisal, survey, etc.), they can cancel the contract and get their earnest money back as well. You just have to make sure the seller is notified before the dates on the contract expire for those contingencies. It is actually pretty rare that a buyer will lose their earnest money unless their agent misses a date or the buyers decide to cancel the contract very late in the process after their contingencies have passed.

Does a contract automatically get canceled after a failed home inspection?

If you find major problems after a home inspection you do not automatically lose the house. There are many options for the seller and buyer to save the deal. The outcome will depend on how serious the problems are with the house and how motivated the sellers and buyers are. The buyer can ask the seller to renegotiate the contract terms or to cancel the contract. Here are a few ways home inspection issues can be resolved.

Buyer agrees to purchase the home as-is. In some case,s the buyer will decide to proceed with the purchase of a home, even if there are major problems. In some case,s the buyer will have no choice because the seller will not make repairs or change the contract (HUD).
Seller agrees to make repairs to a home. Many times a seller will agree to make repairs to a house after an inspection is done. The seller may agree to make all the repairs the buyer asks for or negotiate to make some of the repairs.
Seller agrees to lower the price or renegotiate other terms. The buyer may ask the seller to lower the price, or the seller may offer to lower the price after the buyer requests repairs to be made. The seller can also agree to lower the price and make some repairs.

The buyers can ask the seller to repair whatever they want or lower the price to whatever they want, but the seller does not have to agree to anything. If the seller and buyer cannot come to an agreement on what to fix or how much to renegotiate, then the contract will fail.

Why would a buyer not want a home inspection?

In most circumstances, it makes sense to get an inspection done. Most homebuyers do not have the expertise to know what problems they may encounter when buying a house. A professional contractor or inspector can discover what problems a house has and how serious they are. A home inspection also gives a buyer the chance to ask for repairs or renegotiate the contract. I recommend almost all buyers get a home inspection done.

Having said that, I have not gotten an inspection or asked for an inspection contingency in a contract on the last ten houses I have bought. When you waive your inspection contingency it makes your offer much more attractive to the seller and gives you a better chance to get your offer accepted. This is a great tactic to use in a very competitive market when there are few deals to be had. It is also a great tactic to use in a multiple offer situation.

Do not waive a home inspection if you are not very experienced in buying homes, knowing what repairs are possible to come up and how much they will cost!

Why do I feel comfortable buying houses without an inspection?

I have been a Realtor since 2001, I have more than 20 rental properties and have flipped over 180 houses. I have a lot of experience with repairs on properties and what to look for. I have repaired an entire flip myself back a few years ago, which did not go as planned, but sure taught me a lot! There are many things that can cause a lot of problems on houses and you have to know what to look out for.

Foundations
Roofs
Plumbing
Electrical
HVAC (heating and cooling)
Mold
asbestos
Siding
Wood rot

These are just some of the things you must be aware of and know what to look for if there is a serious problem. These issues do not include cosmetic items or things you can see are wrong like:

Kitchens
Baths
Fixtures
Paint
Carpet
Doors
Windows

Not only do you have to be able to see when there is a problem, but you also have to know how much it will cost to repair these items if there is a problem. When I buy flips or rental properties I am buying them at a huge discount. When I make my cost estimates for repairs on a home, I always budget in extra money for things I may miss or discover during the rehab. I never assume a house only needs the work I can see, which is another reason I feel comfortable buying houses without an inspection.

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Why are HUD inspections different from traditional sale inspections?

HUD homes and some REO sales have many different guidelines than traditional sales. HUD homes are government-owned foreclosures and you can find much more information on them here. For owner-occupants, HUD allows the buyer a 15 day inspection period. The buyer must pay for the utilities to be turned on for the inspection and in some cases, HUD will not allow the water to be turned on. HUD has all of their homes pre-inspected and they do a pressure test on the plumbing system. If the plumbing system does not hold water, HUD will not allow the water to be turned on for the inspection or appraisal.

The inspection HUD does before they list a home provides some information to a buyer, but many times the utilities are not on when that inspection is done. I would never rely on the HUD inspection only; I would get my own inspection on HUD homes as well (if I were a normal buyer). HUD publishes the findings of that inspection (it is called the PCR) on hudhomestore.com under addendums. This is important to know because if HUD lists something that needs to be repaired on the PCR the buyer cannot use that as a reason to get their earnest money back. If the buyer of a HUD home finds an inspection problem and they want to cancel it has to be a new problem that HUD did not find.

HUD will also not make any repairs or lower the price based on the inspection and investors are treated differently than owner-occupants. An investor will not get their earnest money back due to inspection problems period on a HUD home.

Is it safe to waive an inspection if a home is pre-inspected?

HUD homes have an inspection done before they are listed. I have already talked about why you should not trust a HUD inspection and you should have your own done. Some traditional listings will advertise they are pre-inspected. I think it is a good sign that a home is pre-inspected, but again it is best to get your own inspection done. Inspections are relatively cheap compared to the cost of the problems they might find. Even if a house is pre-inspected I would have your own inspection done to confirm nothing was missed.

Is it wise to use an inspection contingency as a negotiating tool?

If you find major problems with a house that you did not know about, it makes sense to ask for repairs to be done or the price to be reduced. Some buyers will make an offer with the intention of asking for a price reduction from the inspection results, no matter how the inspection turns out. I never do this and I find it to be dishonest and unethical. For investors who buy many houses, it can also hurt your chances to get a great deal.

I have seen a few deals fall apart because buyers tried to use this tactic and it made the sellers and real estate agents very unhappy. When investors buy a lot of homes they will make offers to the same agents over and over again. I am a HUD and REO listing broker and list many houses. If I see a buyer who always asks for ridiculous inspections items or price reductions I will let my seller know before they accept their offer. If a buyer or real estate agent gets a reputation for renegotiating every offer on inspections, it will make it harder for them to get offers accepted.

One reason I am able to get so many deals from the MLS, is other agents know I do not play games, I do not renegotiate and if I say I will close, I will close.

How to find a great home inspector

When you use a real estate agent they should have suggestions for inspectors in your area. There are also inspectors you can find online, but I would use the recommendation of a professional in the business. There are many home inspectors and in some states, they need no training or licenses to be a home inspector.

I would interview any inspector before you use them and make sure you are comfortable with their knowledge and services. Some inspectors will nitpick a house over minor issues and some inspectors will not be very thorough and could miss major issues.

I would interview any inspector before you use them, and make sure you are comfortable with their knowledge and services. Some inspectors will nitpick a house over minor issues and some inspectors will not be very thorough and could miss major issues. A good real estate agent can help you choose the right inspector, as well as help you go over the report.

Conclusion

Home inspections are very important for most buyers who are not buying a lot of houses. Even if you buy a lot of homes, you have to be very comfortable judging repair costs and what will need to be repaired if you are thinking of waiving your inspection. If you do waive your inspection, you can get out of a contract but may lose your earnest money in the process. My advice to most is to always get an inspection done.

Build a Rental Property Empire

Source: investfourmore.com

Apache is functioning normally

May 4, 2023 by Brett Tams

Posted on: December 4, 2018

VA loans are a great mortgage option for many military families. We launched the MilitaryVALoan.com Show with our guest host Bernard Edwards to learn from real estate professionals that serve veterans and their families about what it’s like to use a VA loan when purchasing or refinancing a home.

In this episode, Bernard Edwards speaks with real estate professional Chad Vasquez who shares some of the lesser known details about home buying with a VA loan.

Get started on your home buying goals today.

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>>View first episode: Bernard Edwards interviews VA loan consultant William Doom

A VA loan requires no down payment, but you will be charged a VA funding fee.

“With the VA loan, many know one of the benefits is that it requires no money down,” says Vasquez, “but, what surprises them is being charged the VA funding fee.”

A VA funding fee is a one-time, upfront payment required for all VA home loans. This fee helps sustain the program as it is self-funded and doesn’t use taxpayer dollars or other VA program funding. Your funding fee will be determined by the loan amount, your service history, including length and time of service, and the type of loan. Funding fees vary from 0 to 3.3 percent of the loan.

Vasquez also notes: “The good news is that the amount can be added to your loan, so the fee isn’t out of pocket.”

>>Related: 2018 VA Funding Fee Chart

Appraisals may be harder to get for VA loans than conventional loans.

“The VA appraiser is going to make sure that the property is in a certain condition — it can’t have a hole in the roof or extreme peeling paint. This is to protect the veteran and ensure they’re purchasing something of good quality,” says Vasquez.

“The most unique thing I’ve seen required for a VA loan is that the door between the garage and kitchen must be a fire-rated door. This isn’t required for other home loans, but it’s a good safety feature.”

Edwards adds: “For some, it may seem that VA appraisals are a bit harder to pass, but that’s actually great for you as a homeowner. It’s extra assurance of what you’re purchasing that other loan types don’t give.”

Get started on your home buying goals today.

Bernard A. Edwards, the host of “The MilitaryVAloan.com Show” is the founder of Troops To Agents, which empowers veterans and spouses to become successful real estate professionals. He also is launching The Military Transition Camp, dedicated to helping military members design every aspect of their post-uniform life: mindset, health, purpose, career, money, fitness, emotion, relationships, and spiritual growth. Follow him on LinkedIn or Instagram for behind the scenes footage and insights from his interviews and travels. Service history: Technical Sergeant (E-6) Retired; 16 years of service; U.S. Air Force.

FULL VIDEO TRANSCRIPT:

Bernard Edwards: Hey everybody. It is the Military VA Loan Show and I’m here with none other than Chad Vasquez. We’re going to talk a little bit about real estate, about VA loans, and on this show, how we always do, about becoming a homeowner with your military VA loan. Chad, you’ve been in real estate working for how many years now?

Chad Vasquez: Coming up on three years in Hawaii, so I’ve got a little bit of knowledge on how things go here on the island.

Bernard: What was the first year, besides when you had your actual license, when you experienced using a VA loan?

Chad: Using VA loans to buy my first home was in Texas. Then, I actually came to Hawaii and started doing real estate. It’s a little different here, but using your VA loan is an incredible opportunity.

Bernard: Nice. When you first used it in Texas, you weren’t working in the business as much at

that time. You knew that you wanted to get into real estate, you wanted to be able to

invest. What was that experience like? What were some of the surprises that you had?

Chad: That’s a great question. With the VA loan everyone knows some of the benefits are that it’s no money down. That’s one of the fantastic things. One of the surprises in the VA loan is there’s actually a VA funding fee. That’s something that everyone pays so that the Veteran’s Affairs can actually insure those no money down home loans. It can be around 1.5% the first time. It actually goes up each time you use the VA loan. The good news is that actual amount gets put into your loan, so it’s also not out of pocket.

Bernard: Nice.

Chad: But that was a surprise.

Bernard: Nice. Yeah, and one thing that Chad just mentioned is that a lot of people get it, they have this idea that the VA is the one that’s actually giving you the loan, but the VA is actually insuring the loan and with that we don’t have to pay private mortgage insurance, which is something that’s common in the civilian sector.

Chad: Correct.

Bernard: And another thing that we’re able to save money each month. You’ve had quite a few clients, tons of clients each year that have that military background. For them, what’s the process been like as far as obtaining their VA loan?

Chad: Really good question. Usually we either talk to them first or a VA qualified lender does, but either way talking to a real estate agent to get some good advice. We’re always going to give you information, the knowledge that we have about the local housing market, so you can make the best choices for you and your family. That’s the most important. Equally to talking to a real estate agent, is talking to a good knowledgeable VA lender — somebody who does a lot of VA loans, somebody who can help you with that process.

Bernard: Yeah, it’s definitely, there’s some unique things to all different types of loans out there, conventional loans, FHA loans, VA loans, and you do, like Chad’s saying, you do want to have somebody that specializes in that, that’s shown proven success in your particular market because each market could be a little bit different. I mean here on island we have kind of different pockets of the island, and even the way that things might work on one corner of the island versus another may be a little bit different and you do want to work with someone who’s really versed. What are some of the unique things, say, when it comes to home inspections and appraisals that you’ve seen with the VA loan?

Chad: Nice. So here when the VA or Veteran’s Affair appraiser comes out to make sure the value of the home is equal to the size of the loan you’re getting, they’re going to make sure that the property is in a certain condition. That means it can’t have like a hole in the roof, it can’t be having really bad peeling paint, things like that they’re going to hit on the inspection just to make sure the veteran is protected, they’re getting something of a good quality. Some of the unique things we’ve seen is, for example, the door between the garage and the kitchen has to be a fire rated door for the VA. It doesn’t have to be for other home loans, but that’s a good safety feature as well.

Bernard: Great. That’s one thing I’ve noticed is that, yes, for some people they may seem that the VA appraisals and inspections are a little more harder to pass, but that’s great for you as a homeowner ,because that’s extra assurance that you’re getting versus one of these other loans that doesn’t do all that policing for you. You have to go out and find and add these things, whereas the VA loan process they’re really having your back and ensuring that that property that you’re going to get is an investment. There might be some minor things, carpet, cosmetic type things that aren’t able to pass, but really big items that are knocking down the value of your property, those things are not going to pass. That’s the VA having your back.

Chad: Yup.

Bernard: Now, for you, I get to interview real estate professionals from all walks of life, and one of the awesome things about you, you’re a veteran and you’re currently serving in the Guard. Can you tell us a little bit about your military career from active duty to now what you’re doing?

Chad: Absolutely. I was active duty Marine Corps infantry back in 2000 when I joined the first time. After I got out there was a break in service. When we moved back here to the island of Oahu in Hawaii there are all five military branches here, so I actually wanted to go back and do reserve time. So I’m now currently in the United States Air Force Reserve. That helps a lot too because I actually can keep a pulse on things that are changing with the military. There’s things that have changed even in the last 10 years that weren’t the same when I got out.

Bernard: That’s awesome. Well, Chad thank you so much for stopping by.

Chad: My pleasure.

Bernard: Thank you for your service. Check us out on militaryvaloan.com where we’ll be coming at you with more questions and answers.

Chad: Thank you very much. Aloha.

Bernard: Thank you.

Source: militaryvaloan.com

Apache is functioning normally

May 2, 2023 by Brett Tams

Posted on: July 26, 2022

While there are some specific steps pertinent to those using their VA loan benefits, the overall process is similar for all homebuyers.

The good news? It’s not complicated.

The VA home program has allowed millions of veterans, active-duty service members and surviving spouses to purchase or refinance homes. If all of those fellow military members managed it, so can you.

Check your VA home buying eligibility. (May 1st, 2023)

VA Home Loan Program Offers Valuable Benefits

VA loans are backed by the U.S. Department of Veterans Affairs and offer considerable benefits for eligible borrowers. Some of the most valuable aspects of the VA home loan benefit include:

Low or zero down payment
Competitively low mortgage interest rates
No private mortgage insurance (PMI)

12 Steps To Buy a Home With a VA Loan

1. Work out what you can afford

The first step toward your home purchase is determining what you can afford to spend. This involves taking a close look at your household budget.

Once you know where your money is going each month, you’ll have a sense of your potential buying power and the monthly mortgage payment amount you can handle. Keep in mind that homeowners have extra expenses including property taxes, homeowner’s insurance and home repairs.

Creating a budget isn’t a requirement for loan qualification, but it makes you a more informed consumer.

2. Get pre-approved

Getting pre-approved gives you “serious buyer” status in the eyes of sellers and real estate agents. It means you’ve talked to a mortgage lender who has run your finances.

Getting pre-approved includes establishing your eligibility for a VA loan, checking your credit, confirming your income, and working out how big a mortgage you can afford.

Once completed, the lender sends you a letter confirming your loan amount. This means sellers and agents take you way more seriously. And, gives you an advantage when negotiating the price, especially when up against other potential buyers who aren’t approved.

Don’t get confused between pre-approval and pre-qualification. Pre-qualification is better than nothing, but it only means the lender asked you a few questions and relied on your answers (with zero verification) to estimate how much you can borrow. It’s less credible than pre-approval.

VA Loan Eligibility Requirements & Your Certificate of Eligibility (COE)

Your mortgage lender can help you request your Certificate of Eligibility (COE), a document that establishes your VA loan eligibility. Your COE includes information about your military service (confirming you meet the VA’s service requirements), along with the amount of your VA loan entitlement and your VA funding fee.

3. Shop for lenders

You may think all VA loans are the same. While these loans are government-backed, your loan will be issued by a private lender. Some lenders offer great deals and others less great — or flat-out bad.

You should shop around between lenders to find the very best deal for you. But, it’s not just us saying that.

Last year, the Consumer Financial Protection Bureau (CFPB) wrote:

Mortgage interest rates and loan terms can vary considerably across lenders. Despite this fact, many homebuyers do not comparison shop for their mortgages. In recent studies, more than 30 percent of borrowers reported not comparison shopping for their mortgage, and more than 75 percent of borrowers reported applying for a mortgage with only one lender. Previous Bureau research suggests that failing to comparison shop for a mortgage costs the average homebuyer approximately $300 per year and many thousands of dollars over the life of the loan.”

Lenders are required to send you a loan estimate detailing everything you need to know about the mortgage you’re being offered. The CFPB has an exceptionally helpful guide about how to read these — and how to compare them.

Read more: Questions To Ask Before Picking A Lender.

4. Find a reputable buyer’s real estate agent

Usually, as a buyer, retaining a real estate agent costs you nothing. This is because sellers generally pay the buyer’s real estate agent’s commissions. Not every buyer has an agent, but it’s a good idea. Your real estate agent can be one of your greatest assets throughout the transaction. (Just don’t use the same one the seller is using. Their first duty is to the seller.)

A good real estate agent helps you with the following:

Finding your dream home
Negotiating the best possible purchase deal
Completing the buying paperwork
Guiding you throughout each step of the transaction
Troubleshooting any issues

5. Find your home

This is the fun part: picking out your new home.

Depending on your local real estate market, it may take time to find the right property.

Think ahead about your future needs as well as your existing ones. Choose a home that meets your requirements for many years to come if possible and realistic.

Don’t be tempted by a quick-fix purchase with the expectation that you can move again in a few years. Buying and selling a home is expensive and the real estate market unpredictable — you don’t want to do it more often than you absolutely have to.

6. Make an offer

This is the moment when a good real estate agent proves most valuable. So listen to their advice.

It’s a real estate agent’s job to get you the best deal and they should have the knowledge and expertise to achieve that. So leave the negotiations up to them. Of course, your real estate agent should talk through tactics with you. Basically, how to pitch an offer that won’t alienate the owner but will have you paying the smallest amount possible.

Your real estate agent will also advise you on any “contingencies” that should be included in your offer. These are items that allow you to walk away at no cost if certain eventualities arise like an inspection contingency (if the home inspection uncovers unexpected issues) or a finance contingency (in case your mortgage loan has problems). There may be others as well.

7. Pay earnest money

You’ll typically be expected to pay earnest money when your offer is accepted. Your agent can negotiate the amount, but expect to pay between 1 to 5 percent of the purchase price.

As its name implies, earnest money indicates to the seller that you’re a serious (aka earnest) buyer. This isn’t lost money, though. You’ll get it back either as a deduction from your closing costs, or if your closing costs are covered by a third party, you’ll be refunded the amount.

8. Get a home inspection

Home inspections aren’t required to purchase a home, but they’re highly recommended — especially if you’re buying an older home. A home inspection gives you a top-down evaluation of the home and property, including the roof and home exterior, and shouldn’t be confused with a VA home appraisal.

Typically, you can back out of your offer and receive your earnest money back as long as there is an “inspection contingency” written into the purchase contract.

The VA home appraisal is required for a VA home loan and is arranged by your VA lender. It evaluates the property according to the VA’s minimum property requirements (MPRs) and is intended to protect you from purchasing a property that isn’t safe, sound, and sanitary; it also establishes a fair value of the property.

Read more: VA Appraisal & Home Inspection Checklist

9. Update your lender documentation

Every document used to approve your loan must be the most recent. Ultimately, your lender will ask for what it needs, but you can avoid delays by having it all ready in advance. Gather copies of your personal documents, including your latest pay stubs and bank statements.

You’ll also send a copy of the signed purchase contract to your lender. This allows your lender to order the VA appraisal and update your loan application with the address for your next home.

At this point, you may be asked to sign mortgage disclosure documents. These are sent to you by your lender and lay out the terms of your loan in detail — terms may have changed now that a specific home was found and purchase price agreed upon.

Read more: VA Mortgage Loan Document Checklist

10. Meet your lender’s underwriting conditions

Once it has all the required documentation, your lender submits your application to its underwriting department. This is the final step to officially approve your mortgage loan. It’s not uncommon for underwriters to request more information — called conditions — at this stage. Usually, additional documentation is all that is needed.

After the underwriter gives final loan approval, your lender sends your final loan documents to an escrow company.

11. Sign the final paperwork

You’ll likely go to the escrow agent’s office to sign all the final paperwork. Review all the documents carefully. Compare your most recent loan estimate with the closing disclosure. (Closing disclosures provide a final breakdown of all your loan’s details, including “projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs),” according to the CFPB.)

If there are discrepancies between your closing disclosure and your last loan estimate, your lender must justify them. While some costs can increase at closing, others legally can’t. Call your lender immediately if something doesn’t look right.

If you need to pay any closing costs, you’ll pay those at this time too. Bring a cashier’s check or other certified funds to the escrow office when you sign your documents; your escrow company provides the total amount needed.

12. Monitor the status of your loan

Unfortunately, your loan is not complete when you sign the documents. Your lender could take up to a week or more to finalize your loan and transfer the money. Once the lender funds the loan, the seller and all other parties are paid. (The final step: when the transaction is recorded in your jurisdiction’s official records.)

You might think now’s the time to relax. You can, soon. But, not quite yet.

Few home buyers realize that lenders routinely carry out a second (or third) credit check before closing. If your credit score has taken a hit, your lender could cancel your loan — or increase your mortgage rate. That means no late payments and no new credit cards until the loan process is complete.

Buy a home one step at a time

If you’re just getting started, then consider the VA loan program. VA loans can save you a lot of money and make your homeownership dreams come true.

VA loans typically come with lower interest rates than most other mortgages. The ICE Origination Insight Report shows they’re consistently lower than FHA and conventional loan interest rates. VA home loans also require zero money down and no continuing private mortgage insurance.

See if you’re eligible for a VA home loan (May 1st, 2023)

Source: militaryvaloan.com

Step 1: Calculate Your Down Payment and Timeline

Step 2: Budget for the Extra Expenses

Step 3: Maximize Your Savings Contributions

Step 4: Work Hard for a Raise

Step 5: Create More Streams of Income

Step 6: Pay Off Your Biggest Debts

Step 7: Don’t Be Afraid to Ask For Help

Step 8: Store Your Savings in a High Yield Saving Account

In Summary

Browse Related Articles

Browse by Topic

How does a home inspection work when buying a house?

How much does a home inspection cost?

What happens to the earnest money if a contract is canceled due to a home inspection?

Does a contract automatically get canceled after a failed home inspection?

Why would a buyer not want a home inspection?

Why do I feel comfortable buying houses without an inspection?

Why are HUD inspections different from traditional sale inspections?

Is it safe to waive an inspection if a home is pre-inspected?

Is it wise to use an inspection contingency as a negotiating tool?

How to find a great home inspector

Conclusion

A VA loan requires no down payment, but you will be charged a VA funding fee.

Appraisals may be harder to get for VA loans than conventional loans.

FULL VIDEO TRANSCRIPT:

VA Home Loan Program Offers Valuable Benefits

12 Steps To Buy a Home With a VA Loan

1. Work out what you can afford

2. Get pre-approved

VA Loan Eligibility Requirements & Your Certificate of Eligibility (COE)

3. Shop for lenders

4. Find a reputable buyer’s real estate agent

5. Find your home

6. Make an offer

7. Pay earnest money

8. Get a home inspection

9. Update your lender documentation

10. Meet your lender’s underwriting conditions

11. Sign the final paperwork

12. Monitor the status of your loan

Buy a home one step at a time