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VA Home Buyers, arm yourself with a Certificate of Eligibility and a loan pre-approval
Just two or three years ago, you had to settle for a conventional loan, because sellers weren't willing to pay slightly higher closing costs for a VA buyer, and they didn't have to because they had multiple offers on their property. Now, they're giving you another look.
If you bought your home in that environment, at a higher price than it would sell for today, you may not have enough equity in that home to help you buy again. But don't worry... just rent your current home and use your VA eligibility now. If you've never used VA before, or if your full eligibility has been restored by selling a home financed with VA, you may be able to buy without any down payment. Given the competitive nature of this buyers' market, the seller of any home you buy may consider paying part or all of your closing costs.
The Department of Veterans Affairs has a lot of very helpful information on their website about VA loans. I encourage you to read it all, since newer loan originators and real estate agents may not have had much exposure to VA loans. These loans have not been commonplace, at least not in my area, for many years.
5 Steps for Getting Your VA Certificate of Eligibility:
Many mortgage companies can help you obtain your VA Certificate of Eligibility through an automated process. Even if you plan to let them do that, however, read these guidelines to find out what information they will need. It is the same documentation that you must have to request the certificate yourself:
- Complete VA Form 26-1880, Request for a Certificate of Eligibility for VA Home Loan Benefits.
- Send the completed VA Form 26-1880 and any supporting evidence to the Winston-Salem Eligibility Center. Under normal circumstances a response can be anticipated in roughly 10 days. This time frame will vary during periods of heavy activity.
- Include photocopies of your most recent discharge or separation papers covering active military duty, which show active duty dates and type of discharge. If you served on regular active duty (not a reservist) and were discharged after 1975 or you have previously had a VA loan, it may not be necessary for you to provide documentation of your military service. However, it is best to provide such evidence with your VA Form 26-1880 if it is readily available so as to avoid possible delays in processing your request.
- If you are seeking restoration of your previously used benefit, you should include any evidence of payment in full of your prior loan (copy of HUD-1 settlement statement, for example) that you have in your possession. Normally VA receives notification that a loan has been paid, but this does not always happen.
- VA determines your eligibility and, if you are qualified, VA will issue you a certificate of eligibility to be used in applying for a VA loan.
If you have any questions about buying a home with VA financing, don't hesitate to contact me. My husband is a veteran, and we've used VA to buy four or five homes. Add to that my real estate experience, helping many other VA buyers over the years, and I probably know how to answer your question or at least where to find the answer!