Buying a home has gotten even more difficult and expensive in the wake of the wild buying frenzy during the height of the COVID-19 pandemic. According to the Federal Reserve Bank of St. Louis, the median price of a home sold during Q2 2020 was $322,600 — that figure had become $417,700 by Q4 2023. To add insult to injury, mortgage rates have more than doubled from where they were then, too, going from 3.23% in late April 2020 to 7.17% right now (per Freddie Mac).
If you’re an active-duty service member, veteran, or surviving spouse, you have options for finding the right mortgage for you. Keep reading for a few moves that can help you save money.
1. Consider a VA loan
You knew I was going to suggest this first, right? The Department of Veterans Affairs guarantees home loans offered to veterans through regular mortgage lenders. Veterans can buy homes without a down payment (there will be a funding fee, however; this is waived for some vets depending on your circumstances). VA loans are offered by a lot of big-name mortgage lenders, so it’s worth checking out our list of the best VA lenders for some top picks. (And don’t forget to shop around; more on that below!)
2. Explore programs through your state
Another option for affordable mortgages and assistance of all kinds is to look into the programs offered by your state. These will vary, of course, but let’s use New York as an example. The New York State Department of Veterans’ Services maintains a webpage devoted to housing services. There are resources for renters, but also details about federal VA loans and New York State programs like Homes for Veterans. Do some digging into your state’s offerings for veterans — you might be surprised at what you could qualify for.
3. Shop around with a range of mortgage lenders
While you might assume that all mortgage lenders offer the same rates for wannabe homeowners, this is wrong. You’ll find different rates from different lenders, and what’s more, your personal credit and financial situation impacts the rate you’ll be offered, too. Since lenders weigh these factors differently, you have nothing to lose but potentially a good deal by shopping around.
It’s important to select a variety of lender types, too. Consider online-only lenders, big national banks, and even small local financial institutions, because any one of these could have the right mortgage deal for you. Plus, depending on your real estate market, getting local financing could be important.
More: Check out our picks for the best mortgage lenders
I’ll note that I’m not a veteran, but when I started looking for mortgage lenders and applying for pre-approvals, I was told by multiple long-time real estate agents in my area that, in a scenario with competing offers, home sellers were less likely to take an offer backed by an online lender. So ultimately, I ended up applying with a local credit union (and got a pretty good deal there).
Your mileage may vary here — check with your real estate agent. And even if you end up using a big-name online lender, doing your due diligence in checking rates from a range of lenders is your best move to get an affordable mortgage.
It’s getting harder for most Americans to buy homes, thanks to a combination of higher prices and higher mortgage rates (not to mention the fact that salaries haven’t kept pace with rising costs on basically everything). Use these tips for your best chance at scoring a home loan you can afford — you earned it.
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