VA loans give veterans a chance at home ownership-but there’s a lot of confusion and a bit of complexity around the VA loan that frequently make home sellers and seller’s agents wary of accepting them. Considering Veteran’s Day this past Friday, we wanted to debunk some of the myths around VA loans, and in addition share some tips for veterans on the way to make a competitive offer on a house using a VA loan.
Steps to create a Competitive Offer on a House With a VA Loan
There are actually quite a few advantages to accepting a VA loan as a home seller, including:
VA loans often require less paperwork
They are supported by a government guarantee
They have the same closing time frame as any other traditional loan
There is usually no down payment required
The have relaxed credit requirements
Flexible DTI (debt-to-income) ratios
Here are 8 things veterans can do to make their VA loan offers more competitive and a lot more likely to be chosen by a seller:
Always include a pre-approval letter with your purchase offer. This shows the owner that you have good credit and won’t have any trouble obtaining a loan.
Write a letter to the seller explaining the reason why you would like to live in their home. If this is your first chance at home-ownership and you’re planning to start a family, tell the owner! Should you just love the home and can envision yourself living there and taking wonderful care of it, tell them that. This is your opportunity to win the sellers over by letting them learn a little bit more about you.
Consider offering a larger amount of earnest money. Offering above the common 1 percent of the sales price in earnest money is often accepted as a part of the VA loan process and shows that you’re a serious buyer and will not cancel for any contingency aside from the house can’t pass inspection or that you, the purchaser, can’t qualify for financing. If you do cancel, this earnest money might be forfeited to the seller.
Waive certain contingencies that can make your offer more appealing. We wouldn’t recommend waiving the appraisal, inspection or financing contingencies, but talk to your agent about which ones are fine to waive.
Make sure the property you put in an offer on is move-in ready and satisfies the VA’s Minimum Property Requirements (MPRs).
Search for homes that are in good shape. You can utilize this guideline to enhance understand VA appraisal guidelines.
Ask for a disclosure statement, which will document any known defects to the home. This tends to supply you with some protection from things such as termites, renovations made without permits, appliance malfunctions, etc.
Work with a VA lender.
If you’re a veteran and want to talk to Nick & Cindy Davis who are both retired US Army; about using a VA loan, please reach out by calling us at 813-300-7116 or simply click here and we will be in touch. We would love the opportunity to answer questions and help you start your home buying journey!