The Mortgage for the Combat Soldier or Veteran
If you are serving or have served in a combat position in the armed forces, you face unique challenges when you exit the military that non-combat positions don’t face. Because you are facing those challenges, you want buying a home to be as simple and painless as possible. We’ll talk about general guidelines to make your home loan application and closing process easier, and we’ll also talk about some options that may be available to specifically help combat veterans.
The Basic Process Explained
The first step in having a smooth application and closing is to know all the steps that are going to be required. The first thing you want to do is pre-qualify for a loan. This involves calling a home loan company and saying, “I want to pre-qualify for a home loan.” The receptionist will connect you with a loan officer who will walk you through the process. You can do this with just one lender, but it can be helpful and enlightening to do this with at least three lenders. There are also online companies that will facilitate a search for the lenders in your area that will offer you the best terms, but these companies usually charge a fee. In order to pre-qualify, you’ll have to answer a number of questions about your work history, your income and the income of your spouse (if applicable), and your debt. Only a certain level of verification will be done, since the purpose of pre-qualifying is to tell you what you could qualify for if all your information is accurate.
After you pre-qualify, you’ll be given a maximum amount that you could be qualified for from that lender, and you’ll probably also be given an idea of the interest rate and closing costs associated with that loan. The next step is to find a house. You can do this by opening a web browser, going to google.com, and typing “houses for sale in zip code #####”, using the zip code that you would like to live in. If you’re wanting to look in more than one zip code, just choose one, because the websites that allow you to browse homes will all let you search surrounding zip codes as well. If you already have a home in mind, compare its sale price with the amount you are able to qualify for. If the home is just a little bit too expensive, consider contacting the seller or getting a real estate agent to do so and see if they can drop the price a bit for a pre-qualified buyer. Once you’ve selected the house you want, you (and/or your agent) will need to work with the seller to draw up the sales contract. At this same time, you will also need to begin the application process with your loan officer. If neither you nor the seller have real estate agents, most loan officers will be willing to provide legally sound documentation that protects both of you. The loan officer will walk you through the process of applying for the loan, and either your agent or your loan officer will explain how the documents that both you and the seller need to sign work.
You’ll be expected to provide a great deal of financial documents such as bank statements, W2’s from previous tax years, recent pay stubs, and credit card statements. If you have an auto loan, you’ll need to provide a recent statement from that as well. If you have those things on hand the process shouldn’t be too bad.
The Special Options Available to Disabled Veterans
Combat veterans have a higher chance of being disabled, and the VA has two programs that are designed to help disabled veterans obtain housing that gives them freedom and mobility. The Specially Adapted Housing Grant (SAH) “helps veterans with certain service-connected disabilities live independently in a barrier-free environment.” The SAH grant can be used to construct a specially-adapted home on a new plot of land or on a plot of land that is already owned if it is suitable, as well as to remodel an existing home if suitable changes can be made, or even to pay down unpaid principal on a home that’s already been adapted without the use of a grant. The amount of money available through SAH varies, but you can learn more on the VA website.
The Special Housing Adaptation (SHA) grant operates on a somewhat smaller scale and is intended to adapt existing homes of veterans or family members of veterans with whom the veteran lives to help accommodate the veteran’s disability. These grants are only available to veterans with permanent and total service-connected disability such as the loss of limb, severe burns, blindness, or other serious injuries. If you think you might be eligible for SAH or SHA, definitely work with your local VA office to apply.