Must-Know Strategies For Securing A Home Loan As A Veteran

Posted on by Chandan Sanwal

As a veteran, affording homeownership is looking much more possible. This is largely thanks to several federal and private initiatives aimed at helping military and army members. However, while buying a home as a veteran comes with several perks, only 6 percent of past homeowners have capitalized on these benefits. The main reason behind this? Many military members or defense personnel remain uneducated about the home loan process and the options out there. Yet, as home loan interest rates begin to creep up again after lending rates were cut, it is more important than ever that veteran homeowners become familiar with the loan programs available to them if they want to keep their costs low and realize their homeownership dreams.

Research The Acceptable Credit Criteria, And Work To Matching It 

Most lenders will verify your CBIL score, or your credit score in other places, if you apply for a loan or credit card. Having a good CBIL score means you are perceived as being a low-risk customer, and gives you access to lower rates, special offers, and a larger pool of home loan options. In addition to your CBIL score, applicants need to prove their eligibility by proving a list of documentation, including proof of salary, proof of residence, and property documentation such as a registered agreement for sale or quotes from the builder.

Most lenders look for a credit score between 750 and 900. However, if you are unsure of your credit standing, you can easily request your credit report from CIBIL on their website by providing your name and PAN card number. Veterans and those currently still serving can also use a VA loan mortgage calculator to get a glimpse of the mortgage offers available to them using their current credit score. This way, you can work on improving your credit score if you need to in the lead up to buying/building a home.

Match The Benefits Of Various Home Loan Programs From Different Lenders

While the home financing options for veterans are still limited in India, there are a few banks that have included home loan packages with military members in mind. The one you choose to apply to will depend on their acceptance criteria and the suitability of the loan program to your needs. While considering your options, make sure you weigh the pros and cons of all of them before making your loan choice. 

For instance, the SBI Suraya Loan Program is popular with army employees, and comes with a loan tenure of up to 30 years. The minimum age is also lower than some other programs, at 18 years old. However, while the processing fee is waived for applicants, the cost of a CIBIL check and a valuation report is still yours to pay. There are also personal loan options from Andhra Bank, which comes with an 11.7 percent interest rate charge. While you should consider getting the best rates, think about how the additional benefits of these programs suit your financial situation. You may find that a conventional home loan is better in some cases.

Weigh The Benefits Of Additional Perks Like Legal And Credit Counseling 

Most lenders are providing lower interest rates or flexible repayment tenures to veteran mortgage applicants. This is a great initiative to make homeownership more flexible, but there is also a need to help them become more financially literate if they are going to take on a responsibility like a mortgage or home loan. Almost half of Indians are willing to take out a loan to improve their lifestyle, but many are not aware of the process of securing a home loan. 

This is particularly pronounced in the Army or defense forces, where service members spend months away and often are unaware of things like credit scores or house price fluctuations. For this reason, getting financial advice before getting a home loan as a veteran is always recommended. One lender that is providing legal and financial counseling is the Army Group Insurance Fund (AGIF). Elsewhere, you may be able to get advice on your specific situation by speaking to a financial advisor or loan officer before applying. Doing this means you have all the information you need on getting a home loan as a veteran, and the best ways to do it.



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