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What Do First-Time Homebuyers Need to Qualify for a Home Loan?

by So Cal VA Homes
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If you have never purchased a house before then, you might be wondering about first-time homebuyer qualifications. You will be relieved to know that there are many mortgage programs available to make it easy for first-time homebuyers to purchase a house. However, if you are a Veteran or qualified active military member, you have one of the best home loan programs right at your fingertips. The VA home loan program was created to make it easier for Veterans to buy a home or refinance an existing mortgage. The program also supports the construction of a new house on a lot and taking cash out of an existing home to make improvements.

General First-Time Home Buyer Qualifications

For most mortgage assistant programs, a first-time homebuyer is defined as someone who has not owned a home for at least three years or more or has never owned a home.

There are ways to position yourself well before making offers on homes. Before beginning the process of applying, you should check your credit score and, if necessary, improve your debt-to-income ratio. Your debt-to-income ratio divides your prospective mortgage payment plus your current monthly debt by your gross income. The resulting percentage gives lenders an idea of how affordable a new mortgage can be.  But if your current monthly debt obligations are high compared to your monthly income, then your resulting debt-to-income number will be too high. Ideally, you want to pay off as much debt as you can to lower your debt-to-income number. Doing this will make it easier to qualify for a mortgage, and your future monthly mortgage payments and expenses will be more manageable.

Another way to position yourself well is to get pre-approved for a mortgage. For this, you will need to submit tax returns, W2s and paycheck stubs. You will also have to provide proof of a down payment. A lender will pre-approve you for a home if they can establish that you are qualified to borrow up to a certain loan amount and at a specific interest rate. Getting pre-approved shows sellers that you are creditworthy. It is important to know that pre-approval does not mean that your home loan is one hundred percent guaranteed. The lender will still need to appraise the home you are trying to buy to establish its value.

There are many loan programs for first-time homebuyers, and you should research them in advance. FHA and USDA loans are popular. But, if you are a Veteran, then you already have exclusive access to a terrific VA home loan program, the most affordable loan program out there!

Specific requirements for VA loan

A VA home loan is a mortgage obtained through private lenders but backed by the Department of Veterans Affairs. While there is no limit on the amount that you can borrow for a mortgage, the VA does limit how much they will guarantee without a down payment. If you stay within loan limits established year by year, a down payment is not required.  Using a VA home loan is a really good decision because it has incomparable benefits. According to an Urban Institute report released in September 2018, the three main barriers to homeownership are access to credit, the affordability of homes and down payment. As mentioned, VA loans do not require down payments, and they have better interest rates and more flexible terms than a conventional home loan. Private mortgage insurance is also not required.

You may qualify for a VA home loan benefits if you:

  • Served 90 consecutive days of active service during wartime
  • Served 181 days of active service during peacetime
  • Have been an active member of the National Guard or Reserves for 6 years or more
  • Are married to a service member who died in the line of duty or as a result of a service-related disability

Veterans and qualified active service military can get a VA home loan by first applying through the Department of Veteran Affairs. You will have to obtain a Certificate of Eligibility, either by downloading the form from the VA website or getting the form through a VA-approved lender. SoCal VA Homes can help you obtain a Certificate of Eligibility since we are a lender specializing in VA loans. 

SoCal VA Homes has the knowledge base and industry contacts to determine if you are eligible to apply for a VA home loan. We would be more than happy to walk you through VA loan qualification factors and credit requirements, too! Our blog contains more information about the home buying process.

We know that you sacrificed for your country. Your family probably sacrificed in many ways, too. You deserve benefits like a VA home loan, and we want to make sure the process of using those benefits goes as smoothly as possible. We want to make sure that you can obtain the dream of homeownership. Our programs are proven to make this possible for you and your family!

Contact SoCal VA Homes

Contact SoCal VA Homes if you’re ready to pursue buying your first home. We’re happy to discuss first-time homebuyer qualifications and even help you find just the right house for you. We encourage you to check out VA approved homes for sale listed right on our website. If you can’t already tell, we are passionate about making the home buying process as easy as possible for Veterans and active military personnel! Give us a call at (949) 268-7742 or send a message so that we can talk more about helping you use your VA home loan benefits!


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