The process of acquiring a home loan is more complex than you think. Before getting those funds there will be a lot of barriers like credit score check, financial stability, profession criminal record and many more. VA home loan in Texas has a perfect solution for the soldiers and veterans of America to make peace with the heavy regulations of a conventional home loan.
The benefit of VA home loans can be taken up by veterans, current army personnel, and family of the deceased army officers.
However, if you are planning to build the dream house on your own with the help of a VA loan, there are some pointers that need to be covered before you go ahead with the plan.
First, VA home loans are not liberty for owners or builders. Unless you have an insured builder willing to register for the program, VA home loans will not come easy for you.
To top that, here is a list of things you should be prepared for before getting into the construction idea.
- Convince the builder
The home builder you choose to build the dream house should agree upon a low that has no down payment. Not all of them would be willing to put their trust into something like this. There are specific builders in the market who work especially for VA construction project. Look out for them and make your best deal.
They also need to be registered and approved as per the VA rules. Builders are set to comply with certain VA home loan standards.
- The Interest rate factor
Unlike the normal VA home loans, the interest rates of the construction loan are decided with the mutual consent between the builder and the borrower. Here again the interest rate decision is taken after assessing the credit score of the borrower.
- Integrating Cost of Land with Mortgage
There are certain situations allowing you to add the expense of the land along with the construction cost loan. But there are certain pointers to be kept in mind for qualifying the list. The cost shall be included only if the land is purchased within a year of acquiring construction loan. Another option is adding the value of the land if the date purchase falls out of the limit.
- Payment of Mortgage installments
The rule about mortgage payments is probably the best part about construction loans. They do not start becoming due until and unless your house is ready. Next, your first installment can begin late by a year only to be followed by a regular series of installment later. So, you have ample of time to save for the initial payment.
- Stitch-up Permanent and Construction Home Loan
The construction home loan in VA housing can include the mortgage amount for the permanent home loan. Securing and saving you from future financial requirements.
- Gear up for the paperwork
The task of keeping the paperwork ready for you and the builder should not come as any kind of surprise. With a view to getting the loan approved you need to have a blueprint, a plan of the house ready for the presentation. A proof of construction plan stands as the basis of your loan approval.
- One-time closing settlement
Once the interest rates of the construction loan are settled they no longer affect from the changing rates in the market. This way the borrowers are safe from the uncertain increase of rates.
- No down payments
The idea of no downpayment comes without a saying with general VA loans. Most of the lenders are only certified by VA when they adhere to the basic rules of VA home loans.
There are only a few downsides you need to look upon when constructing a house on the pillar of VA loans. They are:
- A slow and steady process
The closing of such construction loans can take up to as long as 45-60 days. As all the documents, the paperwork of the construction plan needs to be assessed properly by the lender. Only after a thorough analysis, the loan can be approved.
- Stress creating process
While buying a house under VA regulations involves only a bit of paperwork and house selection. The construction process comes with a lot of planning and discussion with the builder. Starting from the registration process to deciding the common rate of interest.
- The funding fee expense
Funding fee is the only cost that can bother you as a borrower. The upfront fee goes about changing from 1.25% to 3.3℅. Veterans who are disabled or families of the veterans are exempted from paying this expense.
End of the bridge
To acquire VA loans in Dallas might sound cumbersome, but find a builder with good experience and person you can build a repo with.
A good relationship with the builder can take the pain of your shoulders to a great extent.
All the traditional lenders might not provide you with the benefit of VA housing. So try to search some potential lenders in the market that fall under your scope. Dig your research online, there you will find many lenders along with phone numbers to contact.