Buying a house using your VA loan could be one of the best decisions you make. Furthermore, with low VA loan mortgage rates and plenty of homes for sale at affordable prices, now is one of the best times to buy your dream home. However, there are other costs, apart from the monthly VA loan mortgage payments, that have to be budgeted for every month.
Here is a list of additional costs that you need to budget for in your monthly financial planning:
- Closing Costs: This adds up to 3% to 5% of the total loan amount. Closing costs are mainly determined by the location of your house, as well as the type of loan you opt for. It usually includes title insurance, legal fees, and charges for professional inspection and so on. TIP: Request the seller to make some of these payments, as is possible in a buyer’s market.
- Mortgage Payments: VA loan mortgage repayments will include the monthly principal amount and the interest on the loan amount. This amount is calculated on the loan amount taken, the interest rate and the time period of the loan. Calculate the amount you can afford to pay monthly on your VA loan affordability calculator and work out the mortgage repayments accordingly in consultation with your VA approved lender.
- Home Owners Insurance: You should insure your house and possessions from natural calamities and thefts. Home insurance also provides medical coverage for any accidents on the home property. The average home insurance premium would be $800 a year. Get an insurance quote from your insurance agent before you buy your house.
- Property Taxes: Property taxes have to be paid to the municipality for the upkeep of all the local public properties. Property tax is calculated by multiplying the local tax amount with the official value of the house. Obtain the current rates from the seller or the real estate agent and also mark out the next assessment date to budget accordingly.
- Utilities, maintenance and other related costs:
- Request the seller to provide the past year’s record of all the utility bills. Keep aside a monthly sum for maintenance costs, and for major expenses such as painting, remodeling the deck etc..
- New homes would require new furniture, rugs, and cots etc.. Experts advise you to budget for these purchases so that you do not end up with hefty credit card payments
With a well planned financial budget, you can now buy your dream home. VA Loan Captain can assist you to get VA guaranteed home loans at affordable VA loan mortgage rates. For more information, please visit: www.valoancaptain.com.