If you’re a veteran, reservist or active-duty service member, it’s important to know that there are special loan offerings you may be eligible for when buying a home.
As veterans and service members, we have earned the opportunity to become homeowners, and it’s crucial that we are well-informed about the benefits and options available to us.
The top four things to think about when buying a home:
• Take advantage of free online resources that have been designed for military personnel and veterans so you can be a savvier home shopper. For example, Wells Fargo’s Hands on Banking for Military offers guidance on topics from banking basics and smart spending, to home buying and retirement.
• Before assuming you won’t qualify for a loan, talk to a lender. Be sure to tell the lender that you have served or are currently serving in the military so that they can present the special options available to you, such as a Department of Veterans Affairs (VA) loan. This loan is a home loan guaranteed by the federal government, designed to help those who have served in the military obtain homeownership. The VA loan features no down payment for qualified buyers and allows for gifts or grants to be used in covering closing costs. Plus there is no mortgage insurance required.
• A large portion of qualified loan applicants aren’t taking advantage of the low-to-no-down payment mortgage options available through VA loans. Indeed, in 2019, only 58 percent of veteran homebuyers used a VA loan, according to the National Association of Realtors. This may be due to the common myths such as that active-duty service members, National Guard members and reservists are not eligible. And many are also unaware that they can use their VA loan benefit multiple times by having their benefit restored by, for example, selling your home and paying the loan in full.
• Individual banks, not the Department of Veterans Affairs, offer VA loans, allowing you to work with a lender and a mortgage professional with whom you feel comfortable. You should feel empowered to shop around and find the lender that will best meet your needs.
At Wells Fargo, we have a specialized team that understands the unique military needs of military and veteran customers and are trained to help them make the most of the home loan benefits they’ve earned.
Developing a relationship with a lender your trust is also a good idea since you may later want to refinance and lower your payment using the VA Interest Rate Reduction Refinance Loan (IRRRL) program.
If homeownership seems daunting, know that the advantages of the VA loan can make it more financially and logistically viable. To learn more, visit wellsfargo.com/military.