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Whether it’s your first home, or you’re relocating for retirement, purchasing a home can be the most significant financial decision you will make. So, as an active military veteran or their spouse, what do you need to buy a home? While your specific needs may vary, let’s look at some basic early steps that will help you become a homeowner.


1. Budget

When it comes to buying a house, the most important thing to know is how much you can afford and how you will be able to save for a down payment on your home. (Unless you qualify for a loan with no down payment). Break down your expenses, like the cost of your current rent and mortgage, as well as monthly spending on food, gas, and luxuries like travel or night out.

Compare your income to these expenses, including any debt you might have. How much of your income is available for a mortgage payment? How much can you save for a down payment? Remember: putting more money down can lead to a lower monthly payment on your mortgage. See if there are expenses you can cut back on and consider saving the money from those cuts.

Once you have taken a good, hard look at your budget, and have a clear picture of your financial resources, you will be closer to buying the house of your dreams.


2. Credit Score

A higher score increases a lender’s confidence that you will make payments on time and may help you qualify for a lower mortgage interest rate. This means you will pay less for your home over the life of your loan if you have good credit. Some lenders or loan types may not be available to applicants with lower credit scores. Your credit score is based on several factors:

  • Payment history
  • Amount of available (unused) credit
  • How long your accounts have been open

If you have several long-standing credit cards with minimal month-to-month debt and a history of no overdue payments, you can expect your credit score to be “good” or “great”. If you have very new accounts, no accounts, high month-to-month debt, and/or a history of past-due payments, your credit score may be lower.

Fortunately for veterans, service members, and other qualified borrowers, a home mortgage is still possible even with poor credit thanks to VA loans. Regardless of your service, our experts at The Federal Savings Bank can help you understand your credit score, provide guidance, and find programs to help you secure financing.


3. Savings

Having some savings is another key step towards buying a house. After making down payments, you will need to be financially prepared for closing costs, fees, and the logistical costs of moving. Getting your finances in order, as outlined above, can be helpful in saving for your future.

But you might not need to have 20% of the cost of your home on hand. VA Loans may require no down payment, while FHA loans do not usually require a large down payment. Keep saving but keep in mind you may be closer to buying a house than you think.


4. Loan Pre-Qualification or Loan Pre-Approval

Consider speaking with a loan officer at a mortgage lender, even if you are just considering buying a home. They can help you get a pre-qualification letter, which does not commit you to take out a loan with them, or may not even involve pulling your credit.

This letter will estimate the amount the lender can lend you to purchase your home, based on the information you provide about your income, assets, and debt. Since it’s an estimate, the exact amount you may borrow may vary depending on the property you select, as well as the lender’s underwriting process.

A pre-approval letter is an even better tool for a homebuyer. A pre-approval signals to a seller that a lender has already cleared you to take out a mortgage from them. That tells them you are already that much closer to helping them sell their home. Remember: the lender will likely still require an appraisal on the home you select, and they will issue a final approval before you are clear to close.

There’s a lot to consider when you are purchasing a home. Start saving, and start taking care of your credit. A loan officer at The Federal Savings Bank can help you take care of the rest, no matter your financial situation. Don’t wait to start making your new home!



Subject to credit approval. Terms and conditions may apply. Subject to VA eligibility requirements. Property insurance is required on all loans secured by property. 

This information is intended for educational purposes only. Products and interest rates subject to change without notice. Loan products are subject to credit approval and include terms and conditions, fees and other costs. Terms and conditions may apply. Property insurance is required on all loans secured by property. VA loan products are subject to VA eligibility requirements. Adjustable Rate Mortgage (ARM) interest rates and monthly payment are subject to adjustment. Upon submission of a full application, a mortgage banker will review and provide you with the terms, conditions, disclosures, and additional details on the interest rates that apply to your individual situation.