When we bought our house in November of 2013 I was astonished at how inexpensive it was. We bought our house with only $1000 out-of-pocket thanks to the VA Loan.
It was late September when I jokingly mentioned buying a home to my husband. I was driving to meet him for lunch and on the way I passed several housing developments advertising homes for sale. We wanted to move from the house we were renting because it was over a century old and had the quality of windows and insulation you’d expect from a house of that age and the utility bills were killing us. I assumed we’d be renting again, but my husband surprised me when he said that we should at least consider the option of buying.
We talked to a realtor and asked him how much it would cost out-of-pocket to buy a house. We didn’t have any savings set aside to pay a big down payment and I fully expected that we’d leave disappointed. Surprisingly he told us that with the VA Loan and a credit rating of 700 we wouldn’t necessarily have to come up with a lot of money up front.
We looked at houses and eventually found a house we wanted to buy. We paid an inspector to come look at it. We also paid for a termite inspector. Our realtor scolded us for not talking to him first about that. In the state of Georgia termite inspections are covered by the sellers. Oops.
It turned out the house we wanted had what was, potentially, a sinkhole in the front yard. This is a great argument for hiring an inspector before you buy a house. We backed out of the deal and went back to looking.
After spending another couple of weeks looking at house we fell in love with one and made an offer. The VA Loan guaranteed around $30,000 and acted as our down payment. We wrote a check for $500 in earnest money, which would have been paid to the sellers as compensation in certain situations, but in the end was applied to our home loan when the deal went through.
We also hired another inspector to come check out the house since that saved us from potential disaster last time. This time we didn’t get a termite inspection. The house passed with flying colors.
The offer we made on the house was that we’d pay their full asking price if they’d cover all the associated closing costs. The house had been on the market for almost a year by then and sellers were more than happy to accept our offer.
The only other cost we had to cover was paying the lawyer who did the closing paper work. That came out to about $400.
And just like that, with no down payment, we owned a home in less than two months.
If you are eligible for a VA Loan and have been wanting to buy a house, but are worried about not having a large enough down payment, do some research. You might just be surprised at how little money you actually need.