I live in an expensive city on the west coast but was able to leverage the benefits of the VA loan to buy my first property. The VA loan gives borrowers the ability to buy a property with zero down payment along with other perks like lower interest rates. By using the VA loan, I was able to build wealth through home ownership. Even without the VA loan there are other ways to buy property with less money down or using other perks. As I transitioned from my first property to my second purchase, I was able to turn the property into a rental which continues to build wealth today.
Here is how I did it.
This may be obvious for most, but first make sure you know how much you can afford. You can type something like “how much house can i afford” into google and it will give you a general idea. But basically, make sure you know your total monthly income and expenses.
After searching for a bit, we landed on a few condos that we really liked. Condos tend to be a bit tricky as they have to be VA approved. If not, then there is a process to get it VA approved, but this is more difficult and time consuming. So, it’s best to look for an already VA approved property. You can find this on the VA’s website at https://lgy.va.gov/lgyhub/condo-report. If you are purchasing a Single Family Residence, you can generally bypass this as most SFRs are already VA approved.
When negotiating with the seller, I found it helpful to have a good real estate agent. I was able to negotiate the price down a bit, request a credit towards closing costs and other taxes. In addition to these fees, the VA also charges a VA funding fee of around 2% for first time buyers with zero down payment. TIP – if you are a service-connected disabled Veteran, the VA waives this fee.
After the seller accepts, there are other minor costs related to appraisal, home inspection, repairs (get the seller to pay), etc. I moved in mid-month, so I decided to delay the first mortgage by a month and a half, saving additional money.