Buying a home is one of the most significant commitments you will make in your adult life, and for many first-time homebuyers, the decision can feel rather daunting. 

The National Association of Realtors reports that half of active-duty military buyers are first-time buyers, which means you aren’t alone in that feeling.

To help you determine whether or not now is the right time to purchase your first home, here is the low-down on the home buying process and how to prepare yourself beforehand. 

Get your finances in order first

The most important factor in determining whether or not you are ready to buy a home is the state of your finances. 

Although perfect credit is not required, your credit score plays a huge role in your ability to secure a home loan – and how much your monthly mortgage payment will be. 

While one of the major benefits of the VA loan is its low credit score requirement – a minimum of 580 for many VA lenders – the lower your credit score is when applying, the higher your interest rate (and therefore your monthly payment) will be. 

Aside from reviewing and monitoring your credit score, you also want to review your finances and your budget. A standard calculation used to determine your housing budget is to aim for 28% to 30% of your gross income. You’ll also want to consider utility payments, homeowners insurance, taxes, HOA fees (if necessary), and maintenance fees or repair costs. 

It’s usually recommended to have at least 3 months worth of expenses saved up in case of emergencies. 

Find a lender and get pre-approved

Once you feel confident that your finances are in order and you’re ready to start house shopping, the next step is to find a lender. 

It’s important to do your research when selecting a lender to work with to make sure that you get the best terms for your home loan. Some questions you may want to ask include:

• Do they have VA loan experience?

• What mortgage rate are you getting?

• How long will it take to close on your loan?

• What costs will you be paying up front, and what costs will be rolled into your loan?

• Are there penalties for paying off your loan early?

We recommend asking your military friends and co-workers who have recently purchased a home who they used, or you can browse through the real estate business listings in MilitaryByOwner’s directory.

Your lender will have you fill out an application for pre-approval, which will tell you the amount of home you can afford based on your initial application. It’s not until you actually have an accepted offer on a home and you’re under contract that the lender will pull all of your financials and reports during a process called underwriting.

When your lender gives you your pre-approval, the fun really begins. It’s time to go house shopping!

Work with a realtor 

Working with a realtor during your home buying process is 100% free for you and highly recommended. 

Hiring a real estate professional to represent you means that you have someone who is knowledgeable in real estate contracts on your side to ensure your best interests. 

Once you have found a realtor you want to work with, you can give him or her your price range, wishlist, and a list of priorities. In turn, your realtor will search the MLS database to find homes that meet your criteria and schedule showings for the ones you want to look at. 

Your realtor will handle all of the paperwork for you – from putting in an offer to negotiating a counteroffer, scheduling the home inspection, and all of the legal contract work. Your realtor will be with you all the way through to closing day. Again, this is all at no cost to you! 

Now it’s time to enjoy your new home. Welcome to homeownership!