VA loans are a great benefit for veterans and active-duty service members. They offer advantages like no down payment, lower interest rates, and no private mortgage insurance. However, many veterans make mistakes when using these loans, which can cost them money or cause delays in buying a home. Let’s look at some common errors and how to avoid them.
Not Knowing Eligibility Details
Many veterans assume they automatically qualify for a VA loan without checking the exact requirements. While most service members are eligible, there are service time rules and other criteria that must be met. It’s always best to get your Certificate of Eligibility (COE) early in the process.
Skipping Pre-Approval
Some veterans start house hunting without getting pre-approved for a loan. This can lead to disappointment if they find a home they love but can’t get the financing. Pre-approval shows sellers you’re serious and helps you understand how much you can borrow.
Ignoring VA Loan Limits
Even though VA loans don’t require a down payment, there are still limits on how much you can borrow without one. These limits vary by location. Not knowing these limits can lead to confusion and unexpected costs.
Not Understanding Closing Costs
VA loans help save money, but they don’t eliminate all costs. Some veterans think there are no closing costs at all, but that’s not true. You may still need to pay for things like appraisals, inspections, and insurance unless the seller agrees to cover them.
Choosing the Wrong Lender
Not all lenders are familiar with VA loan rules. Working with one who lacks experience can lead to mistakes or delays. It’s a good idea to choose a lender who specializes in VA loans to make the process smoother.
Not Using the VA Appraisal Properly
The VA appraisal ensures the home is safe and worth the loan amount. Some veterans treat it like a home inspection, but it’s not the same. A separate inspection is still needed to check for things like plumbing, wiring, or roof damage.
Refinancing Too Soon
The VA loan program also allows for refinancing, but doing it too often or too soon can cost more in the long run. Always calculate the savings and long-term impact before refinancing.
