When you are ready to buy your home, Freedom Mortgage will guide you every step of the way with dedicated mortgage specialists who have expertise in the VA loan process. Understanding the steps below will help ensure a smoother and less stressful process.
Step 1: Contact a loan specialist at Freedom Mortgage. He or she can help you explore all loan options and answer any questions that may be on your mind.
Step 2: Get pre-approved before you begin to look at homes. When you get pre-approved, you will be able to shop with confidence because you will know how much home you may be able to afford. Your loan advisor will do an analysis that will look at your income, debt and savings, and use that analysis to quantify how much you can afford for your new home.
Step 3: Find a real estate professional. You need one who understands your needs and your budget. You’ll want someone who can help find homes for you, and do walk throughs of homes on your behalf. Your real estate agent may also be aware of homes that may be going on the market before they do, or have advance notice of open houses. A real estate agent who can do that can give you an edge, especially in hot markets.
Step 4: When you are ready to apply, your loan advisor will submit your application. He or she will also work with you to obtain a Certificate of Eligibility (COE) which is the verification needed to show that you are eligible for a VA loan.
Step 5: You’ll work with your real estate agent to negotiate a purchase agreement (the contract between a buyer and a seller). It outlines the agreed-upon price and terms for the purchase of a home. It is also called an agreement of sale, a purchase contract, or a sale contract.
You will want to ensure the purchase agreement contains a “VA Option Clause.” This clause, also called an “escape clause” – protects the buyer from being obligated to a VA mortgage loan when the appraised value of the home doesn’t match the sales price.
The clause is important because the VA will not guarantee loan amounts that are more than the appraised value of the home (as listed on the Notice of Valuation). If the seller’s price is higher than that appraised value, the buyer may need to come up with the additional funds.