Buying a House in California with Military Benefits: A Step-by-Step Guide

Name: Bridgepoint Funding, Inc.
Price range: $$$

March 5, 2023
Mike Trejo
Loan Programs

Bridgepoint Funding is a California-based mortgage company that specializes in VA loans. Because of that, we often provide educational guides for military home buyers across the state.

In this article, we will explain how you can buy a house in California with one of your biggest military benefits, the VA loan.

Buying a House in California With Military Benefits

The VA home loan program is one of the most significant benefits for veterans and active-duty service members in California. Eligible borrowers can use this program to buy a house with no down payment.

VA loans tend to have lower interest rates and more flexible qualification criteria, as well. Additionally, this program does not require private mortgage insurance, making it a more affordable option for military families.

Here are some of the steps involved when buying a house in California with military benefits, including a VA loan.

1. Determine Your Eligibility for VA Loan Benefits

Most military members and veterans in California can qualify for the VA home loan program, enjoying the benefits that it provides. This program is open to active-duty military, veterans, National Guard and Reserve members. Here’s how to assess your eligibility and get the ball rolling:

Visit the official VA loan eligibility page to see if you meet the basic requirements.
Obtain your Certificate of Eligibility (COE) from the Department of Veterans Affairs.
Find a California mortgage lender that specializes in the VA loan program, like us!
Learn about the main benefits such as no down payment or mortgage insurance.

The takeaway: You’ll need to obtain your COE before you can apply for a VA-guaranteed home loan. You can request it yourself or with the help of a lender (which might be faster).

2. Get Pre-Approved for a Mortgage

If you want to use your military benefits to buy a house in California, it’s wise to get pre-approved for a mortgage loan. This can help you prepare for the house hunting process by identifying a specific price range. Here’s how it works:

Determine your budget and what monthly mortgage payment you can afford.
Gather the necessary documents: tax returns, pay stubs, bank statements, etc.
Get pre-approved for a specific loan amount, based on your income and debt.
Research the pros and cons of different loan types, such as fixed vs. adjustable.
Obtain a pre-approval letter from your lender so you can show it to sellers.
Understand that pre-approval is not a guarantee; stay qualified until closing.
Try to avoid major financial or employment changes until after you close.

The takeaway: Pre-approval can help you identify a specific price range for your home search, increasing efficiency. It could also make the seller more inclined to accept your offer.

3. Start the House Hunting Process

You found out that you’re eligible for a VA loan and you’ve been pre-approved for a certain amount. Now it’s time to put those military benefits to use, by entering the real estate market.

Determine your maximum monthly housing budget and stick to it.
Make a list of the things you need in a home, versus things you want.
Be willing to compromise due to limited housing market inventory.
Know that all homes purchased with a VA loan have to be appraised.
Focus on well-maintained homes that are likely to meet VA requirements.
Research neighborhoods to find the best fit for your lifestyle.
Use all available resources to find a home, including property websites.
Work with an experienced real estate agent who is familiar with VA loans.
Take notes and photos during showings so you can remember each home.

The takeaway: Inventory can be tight within the California real estate market. So allow plenty of time for the house hunting process, and be willing to compromise on your wish list.

4. Make an Offer and Negotiate

You have found a home that meets your needs and you’re now ready to make an offer. This step requires careful planning and forethought. Here’s how to tackle it:

Compare the asking price to recent and similar home sales in the area.
Work with your agent to determine how much to offer for the house.
Consider adding contingencies to your offer to protect your deposit.
Be sure your offer includes an “escape clause,” required for most VA loans.
Make an earnest money deposit to show the seller you’re serious.
Be prepared to negotiate the sale price, closing date, and contingencies.
Be flexible and open-minded, but also know when to walk away.

The takeaway: Making a strong offer supported by recent sales data can greatly improve the chance of having your offer accepted. So take the time to do it right.

5. Have the Home Inspected

You’re not required to have a home inspection when using VA loan military benefits to buy a house in California. But it’s often wise to do so. If you do decide to have a property inspection, keep the following tips in mind:

Hire a reputable and experienced home inspector to conduct the inspection.
Expect to pay somewhere between $350 to $500 for a full inspection.
Consider using an inspection contingency to protect your deposit.
Shadow the inspector (if possible) to gain insight into the home’s condition.
Take note of any major or minor issues found during the inspection.
Prioritize the issues found to determine which ones are deal-breakers (if any).
Negotiate with the seller to address any major issues that were discovered.

The takeaway: Appraisals are required for VA purchase loans, but inspections are optional. Still, you should at least consider having the home inspected before buying it.

6. Close the Deal and Get Your Keys

Hang in there, you’re almost at the finish line! Closing is the final stage in the home buying process when using VA loan benefits. Here’s how it typically goes down:

Conduct a final walk-through of the property a few days before closing.
Review your “Closing Disclosure” to determine your finalized closing costs.
Prepare a cashier’s check or wire transfer, as instructed by your escrow company.
Bring all necessary documents and your identification to the closing.
Verify that all necessary paperwork has been signed and that you have copies.
Ask questions and seek clarification on anything you’re not sure about.
Collect the keys to your new home!

The takeaway: Stay in touch with your title or escrow company in the week leading up to your closing, and know that the process might take one day or even several days.

Other Benefits Available to Military Members

Military members and veterans earn a number of important benefits in exchange for their honorable service. As you’ve just seen, you can use your military benefits to buy a home in California, using the VA loan program.

Here are some of the other benefits enjoyed by veterans:

GI Bill: Since the 1940s, this program has provided educational assistance to veterans and their dependents. GI Bill benefits can help you pay for school and cover expenses while you’re training for a job.
Federal Hiring Preferences: Veterans often receive preferential treatment when applying for federal (GS) job positions.
Military Retirement Pay: Provides a pension to qualified veterans after a certain period of service, usually 20 years.
Veterans Affairs (VA) Health Care: Offers a comprehensive healthcare system for eligible veterans.
Small Business Loans: Programs like the Veterans Business Center (VBC) help veterans start and grow their own businesses.
Vocational Rehabilitation: Provides services to veterans with disabilities to help them find and maintain employment.
Life Insurance: The Servicemembers’ Group Life Insurance (SGLI) program offers low-cost term life insurance for Servicemembers. Additional options may be available for disabled veterans.
Survivor Benefits: Provides financial assistance to the surviving spouses and children of veterans who die while on active duty or in retirement.

Have a question about VA loans? We specialize in offering VA loans to military members in California and serve borrowers across the entire state. Please contact us if you have questions about using your military benefits to buy a house in California, or if you would like to apply for a loan.