October 2019 Rochester MN Real Estate Market ReportIt's starting to get a little chilly out, but the Fall colors are looking great!I wanted to share the October 2019 Real Estate Market Report
7 Veteran Home Buying Costs You Should Keep In Mind
7 Veteran Home Buying Cost You Should Keep in Mind
Buying a house involves a lot of different costs you may not be aware of. Here are 7 veteran home buying costs you should keep in mind.
There are currently over 20 million veterans in the United States alone.
If you've sacrificed and fought for our freedom and country, then you certainly deserve to have the home of your dreams. You want a calm, peaceful, and beautiful home where you can create lasting memories.
However, especially if you're buying a home for the first time, navigating VA loans fees and the veteran home buying process as a whole can be difficult to process.
But especially in recent years, the lending requirements surrounding military home loans have become much more strict.
Additionally, even though VA home loans help you to get a $0 down payment mortgage, that doesn't mean that you still won't have to cover other costs.
This post is here to help you to understand veteran home buying costs.
1. Recording Fees and Real Estate Transfer Taxes
Many first time home buyers don't realize that you'll need to cover the costs of recording fees when you close on your new home.
But what are recording fees?
In a nutshell, this is what you need to pay to your county so that they can put your home's mortgage in the public record. The specific amount that you'll need to put towards your recording fees depends on the county in which you live.
You'll also need to pay for real estate transfer taxes. These taxes can vary fairly dramatically depending on the state in which you live.
This is what the state and county collects in order to transfer the title of your new home over to you.
2. Fees for Your Home Inspection
While the VA loan inspection requirements may "technically" be optional?
It's never a smart idea to make a purchase on a home that you haven't had fully inspected.
The inspection process will help you to determine if there are any serious problems with the house. For example, maybe the home's roof is in terrible shape. Maybe you'll end up uncovering pests and critters. Perhaps you'll even run into issues with the plumbing.
Whatever the case, you can point these issues out to the current homeowner.
If you're lucky, then you may be able to get them to cover at least part of the costs of the repairs and upgrades. After all, you don't want to pay more than a house is worth, and then end up losing even more money because of all the repairs you have to make.
In general, the inspection will cost you up to $500. And while that may seem expensive to some? It's a lot less than the cost of most serious home repairs or renovations.
3. The Cost of a Credit Report
One of the most overlooked costs of buying a home?
The costs of having a credit report run on your credit history when you're ready to apply for your VA loan.
Your credit report will help the lender to determine the amount and length of your loan. It will also help the lender to figure out whether or not they want to give you the loan in the first place.
The bad news?
Even if you're ultimately not approved for the loan, you won't be able to get the money that you spent on getting your credit report back.
So, we suggest that you ensure that your credit is in tip-top shape before you begin the veteran home buying process.
4. VA Loans Appraisal Costs
Did you know that the VA actually has Minimum Property Requirements on homes that they provide loans to help finance?
This essentially means that the VA determines that the home is "worth" helping you to finance and that the price you're being quoted for the home is accurate.
The appraiser actually calculates the home's square footage to better help them to determine the cost of your home. They'll conduct inspections, check for hazards, and much more.
However, don't be discouraged by this cost.
In some cases, you may be able to get the costs of the VA loans appraisal back once you close on your new home.
5. Earnest Money
Military home loans also do not cover the cost of any earnest money, which is one of the most essential parts of any home-buying process.
When you give a seller earnest money, it's a bit like taking the home off of the market and putting it on hold. This way, you can rest easy knowing that no one else will be able to buy the house while you finish up any appraisals and inspections.
If you don't give earnest money?
It's pretty likely that the real estate agent in charge of the home will show it to other buyers.
In general, earnest money can cost you about 1-10% of the home's entire cost.
The good news?
The earnest money isn't just a gift or a bribe you give to the homeowner. It actually goes towards covering the cost of your home once you buy it.
6. Title Insurance
You'll also need to make sure that you've paid the fees and costs associated with title insurance when it comes to veteran home buying.
Title insurance is a policy that will help to protect you, as well as the entity providing you with your home loan, against any title issues that may come up with the home's previous owners.
To be on the safe side, we suggest that you set aside about $1,000 to cover the cost of title insurance.
7. Potential HOA Fees
In the process of veteran home buying, many people find that the property they've fallen in love with is part of a homeowners association.
While there are certainly many benefits to buying a home within an HOA, it's important to understand the fees associated with doing so.
In most cases, you'll need to pay for the cost of your HOA application. This cost is usually determined by the specific HOA. Additionally, if you're approved to buy the home, you'll also need to be certain you can pay the monthly dues required.
Usually, this will be in the $200-$300 per month range, depending on the size of your home and the specifics surrounding HOA projects.
Make sure that you're not getting in over your head from the start.
Benefits of Working with a Professional in the Veteran Home Buying Process
Now that you're more aware of the costs that can sometimes come up in the veteran home buying process?
Let's briefly discuss why working with a real estate agent who specializes in the needs of veterans is the right move.
As you can see from this post, military home loans can be seriously tough to understand and navigate on your own. It can be difficult to figure out if you're eligible, and even tougher to prove that eligibility.
When you work with an experienced agent, they have the right industry connections with VA loans appraisal specialists, inspectors, and other veteran-focused industry professionals.
Even more importantly?
Working with an experienced real estate agent means that you'll have a much easier time finding the right home for your needs. Perhaps you sustained a lifelong injury during the course of serving the country.
You need to find a property that works with any disabilities or even emotional triggers that you might have.
Finally, working with the right agent means that you won't have to wait to find and be approved for the home of your dreams. This is especially important to current military members who may still be on active duty.
When you may need to ship out in a few weeks, you simply don't have time to waste.
If you've already been deployed?
Then working with an experienced agent means that you can trust that they'll find the right home for your needs.
Need Further Assistance with Veteran Home Buying?
We hope that this post has helped you to better understand not only the additional costs of veteran home buying you need to be aware of but also why working with the right real estate agent matters.
You've done so much for your fellow countrymen.
Now, it's time to let someone else take care of you, and work on behalf of your best interests when it comes to buying your home.
We can help you.
Check out our incredible listings, and see if the home of your dreams is among them.
When you're ready to make your dreams of owning a home a reality, we invite you to get in touch with us to get started.
Dan is a licensed realtor in Minnesota. Since 2011, Dan has been a co-owner of the Realty Edge Team with Kyle Swanson, at eXp Realty, at 300 1st Ave NW in Rochester, MN. He shares his life with his so....