How to apply for a VA home loan

How to apply for a VA home loan
Written by Publishing Team

How do I apply for a VA loan?

If you are an active duty member, a veteran, a member of the National Guard, or the surviving spouse of a service member, you may qualify for a VA home loan.

These government loans are insured by the US Department of Veterans Affairs. It has no down payments, no private mortgage insurance, and low interest rates.

For those who qualify, the benefits of Virginia home loans are hard to beat.

It is easy to apply for VA financing. Although these loans are backed by the government, most major lenders provide them. So you can easily check your eligibility and rates online.

Start your VA loan application (January 18, 2022)

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Steps to apply for a VA home loan

Here’s what to expect when applying for a government-backed home loan.

1. Find a VA approved mortgage lender

You can only get a VA mortgage from lenders that are approved by the Department of Veterans Affairs to issue these loans.

The good news is that a large number of mortgage lenders are VA approved. Many banks, credit unions, mortgage companies, and online lenders offer VA loans.

Make sure the lender offers this type of financing before applying. You can usually find information about whether a lender offers this program on their website.

2. Request a Certificate of Eligibility (COE)

Your Certificate of Eligibility (COE) verifies your eligibility for the VA loan program based on your military service history. You need this document to get approved for a VA loan.

Fortunately, requesting your Certificate of Excellence is easy: You can do this online using VA’s eBenefits portal, or you can simply have the lender withdraw your Certificate of Excellence when you apply for a VA loan. They can usually do this within a few minutes.

Note, if you are applying for a VA Refinancing Loan (IRRRL), you do not need to apply for a COE because your eligibility was checked on your first VA loan.

Check VA Loan Eligibility (January 18, 2022)

3. Apply online, in person or over the phone

Once you locate a VA approved mortgage lender and obtain your COE, you can complete an application for pre-approval for a loan.

During the application process, the lender checks your income, credit, and employment to ensure you meet the VA financing requirements. If you qualify, they will issue a pre-approval letter that gives you financial support to make an offer when you find the home you want.

4. Shop for a home

Next, you will work with a real estate agent to locate a property and make an offer.

If the seller accepts your offer, you will send the purchase agreement to your mortgage lender. The lender will then issue a loan estimate containing information regarding the mortgage terms, monthly payments, interest rates, closing costs, and other mortgage fees.

5. Compare rates and choose a lender

Keep in mind, you can (and should) apply with many VA lenders. You can use the “loan estimates” you receive from each one to compare loan terms, mortgage rates, and fees.

Once you find the best deal, you can go ahead with this lender and complete the full underwriting and approval process.

Start your VA loan application (January 18, 2022)

Documents to apply for a VA loan

Getting approved for a VA home loan includes documentation of income, credit, debt, and assets. Lenders use these documents to assess your financial situation and ensure that you can pay the mortgage payments on your new home.

Typical documents required for a mortgage loan application include:

  • Tax returns and W-2s from the past two years (no W-2s needed if self employed)
  • Bank account statements and investment statements
  • Recent Payment Vouchers
  • Rental date
  • Job proof letter
  • A copy of your driver’s license

VA loans require other documents, too. For example, you will need a Certificate of Eligibility (COE) confirming that you meet the requirements for a VA loan.

Your Certificate of Eligibility also provides information about your VA eligibility, which determines how much you are eligible to borrow.

What happens after applying?

You can start your VA loan application in just a few minutes. But the complete loan process generally takes about 30-45 days on average.

After you submit the initial application, your mortgage continues through the underwriting process. This is the time when the lender takes a close look at your credit report and supporting documents. It also evaluates the property to ensure that your new home is a safe investment.

Subscription process

As a home buyer, you can request a home inspection at this time. Screening is not required, but highly recommended to detect costly hidden issues.

In your purchase agreement, you can include a clause stating that Sale subject to satisfactory home inspection. If the home inspection report reveals problems, you can ask the seller to fix these problems before proceeding with the mortgage loan.

home valuation is being Required by mortgage lenders. This involves a third party appraiser visiting the property and assessing its value. As a general rule, you cannot borrow more than the value of the property.

If the home is appraised for less than the purchase price, you will have to pay the difference out of pocket or renegotiate the sale price with the seller.

The underwriting process also includes a title search to research potential ownership issues.

Finally, the underwriter will review your income, assets and debts before final approval is issued and a closing date is set.

Keep in mind that the underwriter may have questions or request additional information during this process. Responding to these inquiries in a timely manner helps keep closing on schedule.

Final approval and closure

Once you have final approval, your loan officer will set a closing date. Here, you’ll sign the mortgage papers and pay the closing costs and down payment (minus any serious money you paid when you made an offer).

A sample of closing costs include:

  • Lender Set-up Fee
  • Discount points (optional to lower your price)
  • Evaluation fee
  • Prepaid property taxes and homeowners insurance
  • register fees
  • Address search fee
  • lawyer’s charge
  • VA finance fee (optional to pay in advance)

The VA Financing Fee is a one-time payment required on all VA loans by the Department of Veterans Affairs. Helps offset the cost of the VA mortgage program. You can pay this fee at closing if you wish, but most borrowers push it down to the loan amount to reduce their initial costs.

Where can I apply for a VA home loan?

If you are considering a VA home loan, know that you are not getting a direct VA home loan.

Despite the government-backed loan, you will need to contact a private lender to obtain the financing.

A good starting point is your personal bank or credit union. But don’t stop here. You should also contact at least three other VA approved lenders to compare rates and terms.

Having a lower interest rate can save thousands over the life of the loan, and lower fees help reduce out-of-pocket costs at closing.

Check VA Loan Options (January 18, 2022)

Do I qualify for the VA Home Loan Program?

Being approved for a VA home loan requires meeting the program’s eligibility requirements.

VA does not specify a minimum credit score, but many lenders will require a minimum credit score of 620. Additionally, your income must be high enough to qualify for the required loan amount, and VA home loans usually require a debt-to-income ratio of no more than 41%.

You also need to meet the VA’s “occupancy” requirements. The home must be a primary residence in which you will live full time (which means you cannot finance an investment property or vacation home with a VA loan).

Regarding service requirements for a VA loan, you will likely qualify if one of the following applies:

  • You served at least 90 consecutive days of active duty during the war
  • I served 181 days of active service during peacetime
  • You have served at least six years in the National Guard or the Reserves
  • You are the surviving spouse of a service member who died in the line of duty, or died of a service-related disability

The benefits of VA loans are nearly unbeatable for first-time homebuyers and current homeowners alike.

With low rates, no PMI, no loan limits, and no down payment required, this program is one of the best programs for home buying or refinancing.

So if you meet the service requirements above, the first thing you should do is check your mortgage eligibility.

Check the new price (January 18, 2022)

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