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How Veterans Can Prepare Their Finances to Buy a Home

Veteran First-Time Homebuyer Financial Guide & Tips

An army veteran and his wife holding a small wooden cutout of a house while sitting on the couch in their new home

Buying a home is one of the largest purchases your clients can make. When your clients are veterans buying their first home, there can be additional considerations. As a loan officer working with veterans, it’s crucial you provide them with an option of a home loan for veterans. Real estate agents working with veterans should be aware of their possible anxiety and suggest tips to relieve it.

Identify an Achievable Timeline

Creating a solid financial timeline for a first-time home purchase is crucial for every potential buyer. A timeline helps develop realistic goals before veteran first-time homebuyers buy. If they’re planning on moving to a new city within six months, they should look at their finances so debts can be paid down or see how much money needs to be saved. Most lenders need at least 30 days to close on a loan.

As a real estate professional, you should give your veteran first-time homebuyer a rough estimate of when they should meet certain milestones in their homebuying process. A plan will set them up for success and relieve some stress.

Understanding the Costs of Buying a Home

Buying a home is a massive purchase – that’s a given. Your clients need a full picture of the required costs and fees so that they can plan accordingly. Cost and fees may include:

Down payment: Qualified veterans can purchase a home without a down payment using a VA loan.

Deposit: Deposits can range from $100 to $1,000 or more.

Appraisal and inspection: An appraisal helps verify the fair market value of a property. Individuals should expect to pay up to $400 for an appraisal and up to $300 for an inspection.

Closing costs: Closing costs include the necessary fees to finalize the home buying process.

Veteran Affairs (VA) Loan

A Veterans Affairs (VA) loan is guaranteed by the U.S. Department of Veterans Affairs. This allows active-duty service members, veterans, and surviving spouses of service members to be eligible for a VA loan. Benefits of a VA loan include:

  • No Down Payment Requirement

  • No Private Mortgage Insurance Requirement

  • No Prepayment Penalty

  • Limited Closing Costs

Real estate lenders should expect to receive several questions from veterans who are buying a home for the first time. Common questions may be about how to apply, proof of military service, and certificate of eligibility.

Setting Financial Goals

Just like everyone else, military members should take the time to strengthen their finances before purchasing a home. Three key goals real estate professionals should outline to their clients include:

Increasing Savings

Your clients need the cash for down payments, deposits, closing costs, and more. Suggest that they start a budgeting plan and look for ways to save more.

Paying Down Current Debts

Eliminating debt will increase their debt-to-income ratio, increasing their purchasing ability.

Addressing Red Flags

Warn your veteran first-time homebuyers of potential red flags such as outstanding collections, tax liens, and more so that they don’t diminish their chances of getting a home loan.

By informing your veteran clients, you’ll be able to help them relieve anxieties and create a sense of excitement for a positive experience. Trust TitlePlus in Baton Rouge to help make the closing process a smooth, easy experience for you and your clients.


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