How to Financially Prepare to Buy Your First Home with a VA Home Loan

Updated: May 7, 2021

Buying your first home is exciting. The process will go much more smoothly if you prepare ahead of time. The first item on your agenda is to get your finances in order and speak to a mortgage lender. If you are an active service member, an armed forces veteran or an eligible surviving spouse, you might be eligible for a Veteran's Affairs (VA) loan. Contact a mortgage company or a loan officer that specialized in VA loans to find out more about VA home loan eligibility.

Have a Secure Job

Mortgage lenders require that you have a secure job before you can be approved for a home loan. Some lenders look for at least two years of steady employment with the same company. If you've changed companies but have the same type of job, you may still be eligible for a home loan. Different types of mortgage loans have different requirements. If you are getting a VA loan, even though it's government-backed, you are still required to have steady employment.

Your Credit Score

Mortgage lenders also look at your credit score. Some loan programs require a certain credit score in order to be approved for a home loan. With the VA loan program, buyers can still be eligible with a lower credit score. Your mortgage lender will inform you about the requirements.

Pay Debts

Mortgage lenders also look at your debt-to-income-ratio. They want to make sure you can comfortably afford to pay your monthly mortgage payment as well as your debts. The best advice is to discuss this with your mortgage lender. Your lender can use a VA loan calculator to determine if your ratio is acceptable. If your debt amount is too high, your lender may advise that you pay some of them down or off.

Down Payment and Closing Costs

VA home loans don't require a down payment. However, there are closing costs that must be paid. Your lender will give you a Good Faith Estimate which will detail how much money you will need to buy your home.

Get a Preapproval Letter

Once you've consulted with one of the best VA home lenders and have your finances in order, you will need a preapproval letter before you go out looking for homes. Your lender will provide this to you. You will submit it with any offers you make on homes.

After you have your finances in order and a preapproval letter from a VA home lender, it's time to work with a real estate broker to help you find your first home. Congratulations on your journey to becoming a homeowner.

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