By Greg Murray, Vice President, Wells Fargo Home Mortgage
As you think about your finances during Military Saves Week and beyond, buying a home may be one of the goals on your mind.
If you’re a veteran, reservist or active duty service member, you have earned the opportunity to become a homeowner. It’s important to know that there are special benefits you may be eligible for when buying a home. Here are the top four things you should know about buying a home as a service member or veteran.
1. There are special financial education resources designed for military personnel and veterans. Take advantage of these free online resources so you can be a savvier home shopper. For example, Wells Fargo’s Hands on Banking® for Military, which offers courses on topics like banking basics and smart spending, also contains a comprehensive guide on homebuying.
2. 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. They can inform you about the options available to you, such as a VA (U.S. Department of Veterans Affairs) loan. A VA loan is a home loan guaranteed by the federal government, designed to help those who have served in the military to obtain homeownership. Gifts or grants can be used to help cover down payment and closing costs, subject to program requirements, and no mortgage insurance is required.
3. A large portion of qualified buyers aren’t taking advantage of the low-to-no-down-payment mortgage options available through VA loans. Indeed, more than 21 million veterans and service members live in the U.S., but over the past five years, a mere 6 percent of them bought a home using a VA home loan, according to the Department of Veterans Affairs. This may be due to the common myth that active duty service members, National Guard members and reservists are not eligible for VA loans (in fact, they may be eligible). Many also are unaware that unmarried, surviving spouses of veterans who died as a result of service or service-related causes are also eligible.
4. Individual banks, not the Department of Veterans Affairs, offer VA loans, allowing you to work with a lender who understands your needs and makes you feel comfortable. A specialized team member who understands unique military needs can help you make the most of the home loan benefits you’ve earned. Developing a relationship with this lender is also a good idea, as you may later choose to refinance through the VA Interest Rate Reduction Refinance Loan (IRRRL) program.
If homeownership seems daunting, remember that taking advantage of VA benefits can make it more financially and logistically viable.
Greg Murray is the National Client Relationship Manager for Wells Fargo Home Mortgage’s Military Program. A U.S. Navy veteran, he served 8 years as a Naval Flight Officer in the F-14 “Tomcat” aircraft and graduated from the Naval Fighter Weapons School (TOPGUN). He has more than 25 years of experience in the home lending industry.