National Financial Awareness Day: Preparing for homeownership with your VA home loan benefit 

In preparation for National Financial Awareness Day on August 14, now is a great time to take a closer look at your financial health so you can make informed decisions about your future.  
 
For Veterans, service members and eligible survivors, financial readiness and homeownership often go hand-in-hand. We’ll publish a short series of stories throughout August focused on this topic. This, the first story, focuses on preparing for homeownership.  

Preparation 

The VA Home Loan Program has helped millions achieve the dream of homeownership. But the best outcomes don’t start at closing, they begin months or even years earlier, with financial preparation. 

If you’re considering using your VA home loan benefit, here’s how to make sure you’re financially ready to buy a new home. 

Know your credit and strengthen your position

Your credit profile plays a key role in your homebuying journey. Even though VA home loans are designed to be flexible, lenders use your credit history to assess risk.  
 
Your credit score is a three-digit number, ranging from 300 to 850, that helps lenders predict your credit risk. Lenders estimate the higher your score, the more likely you are to pay back a loan on time. You can get one free credit report from each of the big three credit reporting companies every 12 months through annualcreditreport.com. 

When you get your report, look for: 

• Mistakes in your name, phone number or address. 
• Loans, credit cards or other accounts that are not yours. 
• Reports saying you paid a bill late when you paid on time. 
• Accounts you closed that are listed as open. 
• The same loan or other item appearing more than once. 

Open a bank account if you don’t have one

If you do not have a bank account, one Veteran-friendly option is the Veterans Benefits Banking Program (VBBP).  
 
VBBP is a partnership between VA and the Association of Military Banks of America. The program provides Veterans, beneficiaries, caregivers and survivors a safe, reliable and inexpensive way to receive and manage their VA monetary benefits.  
 
VBBP connects Veterans with banks and credit unions that understand Veterans’ financial needs and can provide the Veteran community with the highest level of service. Through VBBP, you can also access free financial counseling and free financial education.

Take control of your debt-to-income ratio

Your debt-to-income (DTI) ratio is one of the most important factors lenders consider. It shows how much of your monthly income goes toward debt, as a percentage. 

To improve your DTI: 

• Focus on paying down high-interest debt. 
• Avoid major purchases before applying for a loan. 
• Keep monthly obligations as low as possible. 
• Only apply for credit you need. 

Lowering your DTI can increase your financial flexibility and strengthen your loan application. 

Prepare for upfront costs

One common misconception is that a VA home loan eliminates all upfront costs. While many borrowers do not need a down payment, you’ll still need funds for closing costs, moving expenses and initial home needs. 

VA encourages all Veterans to negotiate for sellers to pay some or all of their loan closing costs. A real estate professional with current-market knowledge can help you negotiate seller contributions. 

Understand the full cost of homeownership

Homeownership comes with ongoing responsibilities, and many of them cost money.   

Be prepared for: 

• Property taxes 
• Homeowners insurance 
• Routine maintenance and repairs 
• Utilities and potential homeowners association fees 

Property taxes and homeowners insurance typically increase over time. If these costs are escrowed, increases can cause your monthly mortgage payment to rise. Homebuyers should build in an extra cost buffer when deciding whether they can afford a mortgage. 

Ask yourself what you can truly afford

Financial awareness begins with understanding your full financial picture. VA home loans offer significant advantages, but you must decide what fits comfortably within your budget. 

Look beyond the maximum loan amount and consider: 

• Your monthly income and recurring expenses 
• Existing debts and financial obligations 
• Your ability to continue saving after buying a home 
• How much money you want to set aside for hobbies, vacations, an emergency fund and other goals 

These tools can help: 

• VBBP’s VetCents: Helps military members improve their financial health by completing a financial assessment. 
• Consumer Financial Protection Bureau’s Home Loan Toolkit: Provides tools to help homebuyers calculate mortgage payments and understand other important financial information. 
• MyMoney.gov: Provides budget worksheets, calculators and checklists to support financial health. 

A home should support your financial stability, not stretch it thin. This National Financial Awareness Day, take a meaningful step toward your future by focusing on financial readiness.  

Homeownership isn’t just about getting the keys. It’s about building stability, equity and opportunity over time. With the right preparation, your VA home loan benefit can be more than a financial tool, it can be a foundation for lasting financial strength.  
 
VA is ready to support you on your homeownership journey when the time is right.