There are 7 steps to buying a California home with a VA loan. These easy steps will provide a map for making the home buying and VA financing process easy and stress-free. The VA loan is a unique home financing program that allows for $0 down payment. There are things that your real estate professionals need to be aware if you are to have an easy time in finding and financing your home with the VA loan program.
Step 1: Choose a local California VA Approved Lender
Choosing a local California VA approved lender is a critical step in the home buying process. While many California Veterans may start with a real estate agent, beginning the process with a lender will be beneficial for the three following reasons:
- You will immediately find out if you’re even eligible for the VA loan.
- The lender will help you to determine your maximum purchase price.
- The lender can then refer you to a real estate agent who is knowledgable in working with the 100% financing VA loan program.
Step 2: Retrieve your Certificate of Eligibility
Your Certificate of Eligibility is your ticket to the VA loan program. It verifies for the lender that the California Veteran is eligible for the VA loan. It shows the amount of entitlement available for the purchase. If there is “full entitlement” then the Veteran will be able to finance any purchase price with no down payment (there are no more loan limits in 2020 for the VA loan program). As long as you followed the directions in Step 1, then you can have your California VA Lender retrieve your Certificate of Eligibility. Your California VA lender will have direct access to the VA portal and can retrieve the Certificate of Eligibility in minutes in many cases. Sometimes more information may be needed and it can take a couple of days. Either way, making sure you are eligible prior to getting too far in the process is critical.
Step 3: Prequalify for your VA Loan
Getting Prequalified is the initial step to getting fully PreApproved for your VA loan. Just like having your financing in place before you buy a car is important, having your VA loan in place prior to shopping for a home is very important. Your California VA Loan Officer will carefully walk you through the numbers and make sure you have a thorough understanding of the payment breakdown including the principal, interest, property taxes, homeowners insurance, and homeowners association dues in the case of a California VA approved condo. Your VA lender will also provide a VA Total Cost Analysis, which shows a detailed side by side breakdown of strategies for your home purchase. Every buyer is different. It’s important to understand that even though there is no down payment required, there are still closing costs and prepaid expenses that will need to be paid just like with any other loan program. If you don’t have the funds for covering those costs then you will want to know your options for achieving a VA No No, which is where a VA buyer not only has no down payment but also no closing costs paid out of pocket. There are advantages and disadvantages to some of these VA No No strategies and understanding which strategy will work best for you BEFORE you make an offer is critical to a stress-free closing.
Step 4: Find Real Estate Agent Familiar with 100% VA Loan Program
If you don’t already have a trusted real estate agent, then you will want to make sure you are working with an agent who has experience and knowledge in what it takes to get a VA offer accepted. Your California VA lender will be able to refer you to an agent who has proven skills in getting a VA offer accepted. There are several myths of the VA loan program that can sometimes make it difficult in a competitive environment to get a VA offer accepted. An agent who specializes in working with Veterans will be able to turn those myth’s around to become strengths.
Step 5: House Hunt and Make Offer
This is the fun part. If you have followed the steps then you already know you’re good with the loan. You know the numbers and how they fit into your budget. You have a VA knowledgable real estate agent who is helping you find a home and its now time to narrow down the search. Your real estate agent will help you make sure the homes you see are eligible for VA financing. For example, if you are in the market for a condo then you will want to make sure you are seeing condos located in VA Approved condo projects. If a condo project is not VA approved then you won’t be able to get a VA loan (unless you work with your lender and the Condo Homeowners Association to get it approved, which can take be an uphill battle). You California VA Lender can help in determining which condo projects are VA approved which will speed up the search. Another reason to work with California VA loan specialist if you’re planning on buying a property in California. There are some local websites that specifically list VA approved condos for sale within that county. For example, to find VA approved condos in Orange County there is www.OrangeCountyVACondos.com. There is also another website in Orange County for VA approved condos at www.OrangeCountyVeteransHomes.com.
Once you find a potential home, your real estate agent will help you write up an offer based on your VA loan PreApproval, making sure all the VA protections and provisions are included in the contract.
Step 6: Lender Processes VA Loan and orders VA Appraisal
Immediately upon having an accepted offer, your California VA lender will jump into action. The loan disclosures will be prepared and the VA appraisal will be ordered. There will likely be updated income and asset documentation needed (paystubs and bank statements), but since you have already been through the PreApproval process, this will be very easy. It will mostly be about the property you are purchasing. You will have property inspections, which re facilitated by your real estate agent.
Step 7: Close your VA Loan and Move-in
The typical time it takes to close a VA purchase transaction is 30 days or less. If you are working with a lender who does not specialize in the VA loan program, or you did not go through the PreApproval process, then there could be some bumps in the road that delay closing. But as long as you have followed the steps, be ready for a fast and easy closing. Get your moving vans ready because you have just bought your home with No Down Payment.
Now that you are in your new home it’s time make sure you are protecting your investment, your home. Your California VA Lender (this depends on who you work with) should be able to show you strategies for paying yor loan off faster than 30 years. A good lender does not go away after the closing. A good lender will remain a valuable resource for years to come.
Authored by Tim Storm, a California VA Loan Officer specializing in VA Loans. MLO 223456. – Please contact my office at Fairway Independent Mortgage Corporation NMLS 2289. My direct line is 714-478-3049. I will prepare custom VA loan scenarios that will be matched up to your financial goals, both long and short-term. I also prepare a Video Explanation of your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.