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VA Loan Home Buying Process In California, Step by Step

The process of buying a home in California with a VA loan is similar to the process when using a “regular” or conventional mortgage. But there are a few additional steps along the way. Today, we will examine the basic steps in the VA loan home buying process.

Buying a Home in California with a VA Loan

How do you buy a home in California with a VA loan? What are the different steps involved with this process? Those are the questions we will examine today, as we explore the VA home buying process in California.

Step 1: Determine how much of a monthly payment you can afford.

Budgeting is one of the most important parts of the home buying process in California. This is true regardless of what type of mortgage loan you use.

When using a VA loan to buy a home, it’s important to figure out how much of a monthly payment you can afford to make. You want to do this before you even start looking at homes or applying for mortgage loans. That’s why we’ve made it step #1.

The good news is you don’t have to be a financial planner to establish a basic VA loan home buying budget. All you really need to do is take a close look at your current monthly expenses and monthly income. Subtract the former from the latter, and you’ll have some idea of how much you can afford to pay each month toward your housing costs.

Step 2: Determine if you have full or partial VA loan entitlement.

If you’ve never used the VA loan program before — or you’ve used it but paid off the loan through the sale of your home — you probably have your full entitlement remaining. In that case, there are no official loan limits that will apply to you.

If you currently have a VA loan that you’re still paying off, you probably have partial or “remaining” entitlement. In that case, you could be limited to the loan limit for your particular county (unless you make a down payment of some kind).

As is states on the Department of Veterans Affairs website:

“If you have remaining entitlement for your VA-backed home loan, find out the current loan limits and how they may affect the amount of money you can borrow without a down payment. As of 2020, if you have full entitlement, you don’t have a VA loan limit.”

Step 3: Get pre-approved for a specific mortgage amount.

Mortgage pre-approval is typically the next step in the VA home buying process in California. You might think of it as a kind of pre-screening. We can review your current financial situation to figure out how much you might be able to borrow.

It’s important to complete this step toward the beginning of the VA home buying process, because it allows you to establish a price range. Then, when you move on to the house hunting stage (below), you’ll have a much better idea how much you can afford to purchase. This can prevent you from wasting time shopping for homes that are too expensive for you.

Step 4: Begin the house hunting process.

For most VA loan home buyers, house hunting is the most interesting and exciting part of the buying process. This is when you go out and look at houses and imagine yourself living in them. It’s much more engaging than all of the paperwork that goes along with the home loan process!

But notice that house hunting comes after the pre-approval process. This is the logical way to proceed through the VA home buying process in California. If you were to skip the previous step, you wouldn’t have a firm price range in mind when shopping for a house.

Step 5: Make an offer and agree on a purchase price.

So, you have found a home that checks all of your boxes and falls within your price range. You’re now ready to put an offer on paper. This is a crucial step in the VA home buying process, because it determines how much you are going to pay for the house, the closing date, and other important terms of the sale.

If you’re not familiar with real estate documents, it’s a good idea to have an agent on your side. An experienced real estate agent can help you make a smart offer based on recent sales activity in the area. An agent can also help you avoid unwanted delays that might end up costing you the home.

You (along with your real estate agent) will review the seller’s asking price to determine if it’s reasonable. You’ll then submit an offer for that amount, along with other terms. And you’ll wait to hear back from the seller.

This can play out in one of several ways:

  • The seller might accept your offer as-is.
  • The seller might reject your offer, possibly in favor of a stronger one.
  • The seller might make a counter-offer by changing the sale price or other terms.

This is another reason why it’s good to have a real estate agent. Your agent can help you navigate the back-and-forth negotiations that are common during the buying process.

Step 6: Wait for the VA loan home appraisal to be completed.

A VA loan home appraisal is slightly different from the appraisal process with a conventional or regular mortgage. The VA-approved home appraiser has two primary objectives. He or she will make an educated guess as to the current market value of the home. The appraiser must also make sure the property meets the minimum requirements set forth by the Department of Veterans Affairs.

While this is an important part of the VA home buying process in California, there really isn’t much for you to do. It’s usually the lender who orders the appraisal. The home buyer simply has to “wait it out.”

If the home appraises for an amount equal to or greater than the purchase price, the loan will probably move forward. On the other hand, if the appraiser determines the house is worth less than the sale price, buyer and seller have some things to talk about.

In some cases, a seller might lower the asking price to match the appraisal (if they feel it’s warranted). In other cases, the seller will refuse to change the asking price, and the buyer will have to move on to another property.

Step 7: Pay your closing costs, sign your documents, and get your keys!

Once you get a “green light” from the underwriter, you can move on to closing. This is the final step in the California VA home buying process, from the buyer’s perspective.

Closing is when you pay all of your closing costs and sign all of the loan documents and other paperwork. Before the day you close, you’ll receive a document that itemizes all of your costs along with the total amount due at closing.

So there you have it, a step-by-step guide to the VA loan home buying process in California!

Questions? At Bridgepoint Funding, we are passionate about this program because it rewards our servicemen and women. Please contact us if you have questions about the VA loan process, or if you like to find out where you stand in terms of your borrowing capacity. We look forward to helping you.

Mike Trejo

Mike Trejo is a Bay Area mortgage broker with 20+ years of knowledge and experience.

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