As a veteran, piling the process of buying and financing a home on top of transitioning back to civilian life, dealing with combat-related disabilities, or any other situation can be overwhelming. Fortunately, one of the perks of being a veteran is the access to several military benefits when purchasing a home.
Are you a veteran looking to buy a home in St Louis? Be sure to consider the following practical home-buying tips from a St. Louis real estate agent.
1). Understand the VA home loan and consider a VA lender
Most veterans are eligible for a VA loan. A VA home loan is provided by private lenders backed by the US Department of Veterans Affairs. Fortunately, the VA loan is not strictly available for veterans but also for their family members.
VA loans require a 0% down payment. They are competitive and affordable ways for veterans to save money on their St. Louis home purchases. Unlike traditional mortgages, credit requirements are less strict, making it ideal for veterans without a long-standing credit history. Additionally, with VA loans, you don't necessarily require Private Mortgage Insurance (PMI)
Understanding the basics of VA home loans and how to use your military benefits properly are minor pieces of the mortgage process. Speak with a qualified mortgage lender to better understand how to maximize the use of your benefits.
2). Explore every lending option
A VA loan is perfect for individuals looking for a home loan in St. Louis with zero down payment and limited closing costs. Despite their amazing features, VA loans have alternatives available to every American, including veterans.
Other lending options include:
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FHA Loans: Federal Housing Administration (FHA) loans allow veterans to purchase a home without needing a sizable downpayment or good credit. They are particularly best suited for first-time homebuyers.
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USDA Loans: Veterans looking to purchase homes in the non-urban areas of the United States can qualify for a zero-down US Department of Agriculture
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Agriculture-backed loan: A USDA home loan allows veterans and other applicants to secure mortgages, provided the property is within a qualified area.
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Conventional Loans: Traditional loans are government-backed, unlike VA loans. Furthermore, conventional loans' financial standards and credit requirements are usually limited, unlike VA and FHA loans.
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Native American Direct Loans: They are mainly for qualifying Native service members to utilize VA loan benefits for housing on federal trust lands. As a non-Native American veteran with a Native American non-military partner, you can qualify for a loan under this program.
Get a St. Louis financial expert to advise you on all options.
3). Focus on your finances and credit
Unlike traditional mortgages/ loans, VA loans have less strict credit requirements. However, this doesn't mean you should ignore one of the most crucial financial home-buying tips. Homebuyers require good credit to qualify for alternative financing such as bank loans.
Assess your credit score regularly to ensure your financial actions don't limit your credit growth or improvement. You can also seek practical ways to help you improve your credit, such as timely debt repayments.
Go over your finances, including income, debt, and monthly budget. Checking your finances in every aspect can help determine how much you can afford to purchase a home in St. Louis.
4). Check other financial resources
Veterans can access several other home buying grants and programs providing financial resources. These include:
- Dream Makers Program: Eligible veterans and active duty service members can access grants for down payments and closing costs under this program. The program is based on a 2-1 match of what homebuyers contribute towards property purchases.
- State and Local Program: Several state and local programs also provide veterans with housing grants in their local areas. As soon as you know the location of your new home in St. Louis, you can check the VA's National Resource Library for detailed housing assistance.
- Adapted Housing Grants: They can assist veterans with permanent and total service-linked disabilities in buying or building an adapted home.
5). Don't forget homeowners insurance for veterans
Borrowers must purchase a homeowner's insurance to secure a home loan. Most VA loan lenders typically require veterans to pay at least one year's worth of insurance payments upfront, then make monthly payments into an escrow account. Such can be bundled with the loan payments.
Most home insurance companies issue discounts to veterans. Other companies also specifically cater to military personnel, such as USAA and AFI. These companies issue competitive rates and possible added benefits. However, veterans should compare rates and benefits from non-military companies too to ensure they get the best deals.
6). Ensure you understand all upfront costs and closing costs
A VA loan can help you reduce the costs of purchasing a home and possibly avoid paying the down payment. However, you should be prepared to handle any upfront home buying costs such as loan originating fees, agent commission, and upfront interest and taxes.
You also need to consider every cost that you need to take into account when purchasing a home in St. Louis. While you shouldn't count on it, you can try convincing the seller to help you pay some of these fees.
7). Consider a real estate agent
Hiring a local real estate agent should always be at the top of every potential buyer's checklist. However, you shouldn't just hire any real estate agent.
Consider hiring a real estate agent with experience dealing with military buyers. Furthermore, consider hiring a real estate agent with experience selling and buying houses in St. Louis.
A local real estate agent understands the local market and can provide in-depth, valuable insight into a home purchase. Professional and certified realtors understand different buyers' needs and can help you find the best homes for sale in St. Louis matching your preferences.
When hiring a real estate agent for your veteran home purchase in St. Louis, a huge plus is getting agents familiar with the VA loan application process as well as VA home requirements. Since these differ from conventional alternatives, working with an expert in such areas makes it easy to delegate the home buying process fully to the agent.
8). Check the buying season
The real estate market is impartial to every American. Even as a veteran, a buyer's market remains to be that, similar to a seller's market. Real estate prices fluctuate throughout the year. In most cases, the hottest buying season tends to run from April to July.
The right time to buy a home depends on the area you want to move in and your preferences. For best home buying practices, discuss with your St. Louis real estate agent to find out the best times to buy a home within the area.
9). Find the right home
St. Louis has a wide range of property types, from traditional single-family homes to condos. Furthermore, every potential home buyer—veteran or not—has needs and preferences in a home.
Take time to consider which neighborhoods you prefer in St. Louis before starting the loan application process. Communicate your preferences in a home with your realtor. You can also calculate the local cost of living and check for important amenities if it matters.
10). Don't forget the home inspection
A comprehensive home inspection reveals major underlying issues that can be a serious turn-off. Underlying issues in a home for sale may include:
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Worn out plumbing
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Weak structural integrity
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Major electrical faults
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Damaged and unseen flooring.
Unfortunately, if you aren't careful, a seller can sell you a home with one or more of these issues. As such, you will have to pay out of pocket to have the issues fixed or replaced, especially after you've closed the sale and can't hold the seller liable.
Ensure you hire a qualified and certified home inspector to conduct a thorough analysis of the home you wish to purchase. If you unearth any issues, you can use them as bargaining chips or simply walk away, especially if the seller isn't willing to handle them.
Common mistakes to avoid during the home buying process in St. Louis
As a first-time veteran home buyer, here are a few important things you need to avoid:
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Failing to think about the possibility of a resale before buying
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Failing to inquire sufficiently with lenders and missing up on great deals
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Making a less attractive offer to the seller. Sellers are naturally wired to pick the best offer on the table.
Ready to buy your St. Louis home?
The home buying process doesn't have to be challenging for anyone. As a veteran, you are used to getting things done the right way, which often means going the extra mile to outsource help.
Fortunately, we are ready to step up to the challenge at Lance Merrick Real Estate Agency and help you find your dream home in St. Louis. With notable experience and a team of industry-leading realtors, we can help find and negotiate the best homes for sale in St. Louis.
Reach out to us to help you find your dream home, whether Ladue real estate or any part of St. Louis County.
