For many veterans and active-duty military personnel, buying a home can seem like a very involved process that can be tough to get through.

But the process of securing financing your home can be easier to get through if you arm yourself How to Get a VA Loan: A Step-by-Step Guide to Securing with the right knowledge before you begin your search.

 In many ways, getting a home backed by a VA loan is similar to buying a home that isn’t backed by one, but there are a small handful of extra provisions that, as a service member, you should be aware of.

 So let’s have a look at just what it takes to get to a VA loan and you’ll see just what you can expect to go through as you begin looking.

 The Home Buying Process

Before anything else, it’s important to know just how the home buying process works so that you can avoid any missteps as your proceed. 

1. Find and Work with a Real Estate Professional – Real estate can be a complicated thing, so you want to work with someone who can help you navigate the process as smoothly as possible.

 This agent will be able to take the information regarding what you’re looking for in a home and find something that fits your needs. Beyond that, your agent will be able to provide you with other information concerning things like schools and public services as well. 

2. Shop for a Lender – Not only do you want to a lending institution that provides VA back loans, but you want to be sure that you find someone who offers terms that you are comfortable with.
3. Apply for a Certificate of Eligibility (COE) – This document provides lenders with the information they need to verify that you are eligible for a VA backed loan by showing that you are, or were, enlisted.

 You can apply for this yourself through the United States Department of Veterans Affairs or your lender might be able to get it for you. 

4. Apply for the Loan – After you have found a home that you like, you will need to apply for the VA loan with the lender. 

During this part of the process, information like bank statements and credit information will be gathered to ensure that extending a loan to you is a financially viable option for the lender. 

The home is also appraised during this time to estimate the value of the home during the time of inspection and find any obviously needed repairs. This isn’t a comprehensive inspection as far as repairs and the like are concerned. 

5. Close the Property – At the end of the process, the property is closed and everything is transferred to you. Everything is conducted by a representative that your lender chooses to make sure the process goes smoothly. 

Determining Your Eligibility  

In order to be eligible for a VA loan you need to fulfill one of the following criteria: 

• You have at least 90 days of active duty during wartime and have been discharged under honorable conditions.
   
• You have at least 181 days of active duty during peacetime and have been discharged under honorable conditions.
   
• You are a member of the selected reserves or National Guard and have completed six years in either branch as a member of an active unit who attended weekend drills and 2-week active duty for training. 

Beyond that, you also need to have been discharged honorably, placed on the retired list, transferred to Standby Reserve or an element of Ready Reserve other than the Selected Reserve after service characterized as honorable service. You can also be eligible if you continue to serve in the Selected Reserves. 

• You are married to a veteran who died while in service or from a service connected disability and you remain unmarried.
   
• You are married to a service member who is missing in action or is a prisoner of war. 

It’s important to note that, for service members who fulfill the criteria of 90 days of active duty in wartime or 181 days in peacetime, it’s possible to be eligible for a loan if you served less than the designated number of days, but were discharged due to a service related injury.   

Click here to learn more about VA loan requirements and VA loan eligibility.

Advantages of VA loans

Compared to traditional home loans, VA backed loans offer you a number of advantages that include: 

• No Down Payment – With a traditional home loan, one of the big costs is the down payment associated with purchasing the home, but your VA backed mortgage doesn’t have such a cost.
   
• No Mortgage Insurance – VA loans are guaranteed, which means that a portion of the costs to the lender will be covered in case you ever default on your loan. This provision keeps you from having to pay mortgage insurance from month to month.
   
• No Closing Costs – Closing costs are another cost associated with buying a home and can easily add up to a small percentage of the actual loan, but those costs are eliminated through VA backed loans. 
   
• Lower Interest Rates – In many instances VA backed loans have lower interest rates than VA backed loans, meaning that you will be able to save money over the long term. 
   
• Picking Your Loan – Home loans for veterans can be adjustable rate or fixed rate, and you can pick one or the other depending on how long you plan on remaining in the home or what you think your ability to pay will be over time.  

The VA home loan program is designed to make it as easy as possible for service members to purchase homes. 

By taking advantage of the many benefits illustrated here and following the process outline above, it’s possible for you to get the home you want.

The FHA or the Federal Housing Administration helps those people without enough cash or ability to buy a home. They offer loans at low down payments and also allow you to use gifts from relatives either in the form of cash or home equity to buy a home. Are you confused as to what the home equity is about with regards to gifts? This is known as the ‘gift of equity’. Gift of equity can be made by any relative and also the parents. When a person does not have the capability to obtain a traditional  mortgage a gift of equity can work in favor of that person.

Gift of equity and mortgage

In order to buy a home in the form of gift of equity, it is important for you and the other person helping you with home buying, to be relatives. When you aren’t in a situation to take out a mortgage and if you have a relative who is ready to help you buy a home, can use the gift of equity. However, in order to buy a home through this process, there are various things that you will have to keep in mind.

First of all, the amount of the mortgage that you are going to take out in order to buy the home through gift of equity, is not supposed to cross more than 85% of the home value. The main thing is that a gift of equity on a property can be made on any amount that is being supported by the appraised value of the home. That is, if the price of purchase is $200,000, the loan amount at the maximum can be $170,000. So, now if the relative who is giving you the gift tries to get back $190,000 from this deal, you will be required to come up with a down payment amounting to $20,000. This is how the deal actually works.

When the person making the gift enters into a sale contract, the lender requires that the person should be able to provide a gift affidavit which will have all of the details of the gift that is offered. This will also have to certify that no forms of repayment on this have to be made. The letter should also have the name, address and phone number of the person providing the gift. The relationship with the borrower must also be stated in this same letter.

According to the FHA guidelines, the relative can be a parent, a spouse, children and grandparents. In fact foster child or those who has been legally adopted too can be considered to be relatives with regards to gift of equity.

Guest Author: Pamela Harris
http://www.mortgagefit.com/

The real test of housing market health will come when the jobs report starts picking up steam.  There is a lot of uncertainty about the upcoming election, whether ObamaCare will be repealed, and the ability of small business to add employees with increasing governmental regulations and burdens.  The politicians are promising us the world, but we’ve learned that most politicians will say anything to get elected, or re-elected, so we can’t really place much stock in optomistic rhetoric for a quick and lasting recovery.

Even if we have come close to hitting the bottom, that is a marked difference from recovery.  I believe we will be scraping along the bottom for most of the rest of this decade.  I envision the housing market as a stingray, sliding along the bottom, content  to languish in the comfort of the sands, never willing to venture too far off the bottom.  But I do believe that we will have fully hit bottom in the next three to four years in nearly every Metroploitan Market in the U. S. and by the end of the decade we will see a revival in the housing sector. 

Remember, we went down a long, long way, even experiencing an 80% drop in some extreme markets, and there is a long way to go to get to a complete reversal.  The bottom line, there are a lot of reasons to be optimistic.   Housing starts  and residential sales appear to have hit the floor. Builders have been cutting back seriously for the last 4 years and last years’ housing starts were the lowest level on record at just 434,000 homes.  So after nearly 6 years of falling home prices,  U.S. housing markets now appear to be entering into a new phase which could best be described as a prolonged bottom.

The Housing Industry in the United States is in the worse condition it has ever been since the Great Depression.  We have seen waves of foreclosures, short sales and continued drop in existing housing sales, as well as monumental drops in new home sales.  Major lending institutions were bailed out by the federal government, but used the emergency bailout funds they received to shore up their balance sheets as opposed to loosening up credit requirements for potential homeowners. 

After approximately five years in decline and three years since the Economic Catastrophe at the end of 2008, the Housing Industry has managed to level off its rapid decline and has recently showed some improvement.

The Best News in Eighteen Months

The announcement that brings a touch of optimism to real estate markets is the Housing Starts and Building permits which jumped to the best numbers since a year and a half ago.  Some economists take this as an indication that the Housing Industry has reached its bottom and will begin to level off and eventually improve.

Housing Starts

Tuesday’s data also showed increases in new construction for single family residences which is the latest sign of an economic recovery that is dependant on substantial risks at home and abroad caused by the International Debt Crisis.

Joel Narhoff, Chief Economist at Narhoff Economic Advisors stated “Investors should take heart that if Europe doesn’t melt down and Congress figures out how to extend the payroll tax cut, the economy can continue to gain momentum”.

While too soon for optimism, we can take these numbers to be at least an initial indication that the Housing Crisis has a potential to right itself.  This would be the best thing to help lead the U. S. Economy out of its current climate of despair.

 Author: Don L. Gillett
E-mail: donlgillett@verizon.net