How do I apply for a VA loan?
If you are an active service member, veteran, member of the National Guard, or the surviving spouse of a service member, you may be eligible for a VA home loan.
These state loans are insured with the US Department of Veterans Affairs. They offer no down payments, no personal mortgage insurance, and low interest rates.
For those who are eligible, VA home loan benefits are hard to beat.
And it's easy to apply for VA funding. Although these loans are supported by the government, most of the major lenders offer them. You can easily check your eligibility and prices online.
Start your VA loan application (May 10, 2021)
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Steps to Apply for a VA Home Loan
Here's what you can expect when applying for this Government Assisted Home Loan.
1. Find a VA approved mortgage lender
You can only obtain a VA mortgage from lenders who are approved by the Department of Veterans Affairs to issue these loans.
The good news is that a large number of VA approved mortgage lenders are approved. Many banks, credit unions, mortgage lenders, and online lenders offer VA loans.
Confirm that a lender offers this type of financing before submitting an application. Information on whether a lender offers this program can usually be found on their website.
2. Request your Certificate of Eligibility (COE).
Your Certificate of Eligibility (COE) verifies your eligibility for the VA loan program based on your military service history. You will need this document to get approval for a VA loan.
Fortunately, getting your COE is easy: you can do it online through the VA's eBenefits portal, or you can simply have the lender look up your COE when you apply for a VA loan. You can usually do this in just a few minutes.
Note: If you are applying for a VA Interest Refinance Loan (IRRRL), you do not need to apply for a COE as your eligibility was verified on your first VA loan.
Check Your VA Loan Eligibility (May 10, 2021)
3. Apply online, in person, or over the phone
Once you've found a VA approved mortgage lender and received your COE, you can complete a pre-approval application for a loan.
During the application process, a lender will review your income, credit, and employment to ensure you meet VA funding requirements. If you qualify, you will be sent a pre-approval letter giving you financial assistance to make a bid when you find the home you want.
4. Buy a home
Next, you'll work with a real estate agent to find a property and submit a bid.
If the seller accepts your offer, send the sales contract to your mortgage lender. Your lender will then issue a loan estimate that includes information about mortgage terms, monthly payments, interest rates, closing costs, and other mortgage fees.
5. Compare the rates and choose a lender
Remember, you can (and should) apply to multiple VA lenders. You can use the loan estimates you receive from each individual to compare loan terms, mortgage rates, and fees.
Once you find the best deal, you can move on with that lender and complete the full subscription and approval process.
Start your VA loan application (May 10, 2021)
Documents to apply for a VA loan
To be approved for a VA home loan, you must document your income, credit, debts, and assets. Lenders use these documents to assess your financial situation and to ensure that you can afford the mortgage payments on your new home.
Typical documents required for a mortgage loan application are:
Tax returns and W-2 from the last two years (no W-2 required if Self-employed) Bank statements and investment statementsLatest pay slipsRental historyCertificate of employment cessationCopy of your driver's license
VA loans also require other documentation. For example, you will need a Certificate of Eligibility (COE) that confirms that you meet the requirements for a VA loan.
Your Certificate of Eligibility will also contain information about your VA Eligibility, which will determine how much you are eligible to borrow.
What happens after I apply?
You can submit a VA loan application in minutes. However, the full credit process usually takes an average of 30 to 45 days.
After the first application, your mortgage will continue through the underwriting process. This is when your lender will take a closer look at your credit report and related paperwork. It also evaluates the property to ensure your new home is a safe investment.
The drawing process
As a home buyer, you can request a home inspection at this point. Inspection is not required, but it is highly recommended to uncover costly hidden problems.
In your sales contract, you can include a clause stating that the sale is subject to a satisfactory home inspection. If the home inspection report reveals any problems, you can ask the seller to fix those problems before proceeding with the mortgage loan.
Mortgage lenders require a home valuation. This includes an external appraiser visiting the property and assessing its value. As a rule of thumb, you can't borrow more than the property is worth.
If the home is valued less than the purchase price, you will have to pay the difference out of pocket or renegotiate the selling price with the seller.
The drawing process also includes a title search to check for potential title issues.
Finally, the underwriter reviews your earnings, assets, and debts before giving final approval and setting a deadline.
Be aware that the underwriter may have questions or request additional information during this process. Answering these inquiries in a timely manner helps keep the schedule.
Final approval and completion
Once you have final approval, your loan officer will set a deadline. This is where you sign the mortgage papers and pay your closing costs and down payment (minus the money you paid when you submitted an offer).
An example of your closing costs are:
Lender origination fee Discount points (optional to lower your interest rate) Valuation feesPrepaid property taxes and homeowner insuranceRecording feesTitle search feesHitting feesVA funding fee (optional to be paid in advance)
The VA Funding Fee is a one-time payment required by the Department of Veterans Affairs on all VA loans. It helps offset the cost of the VA mortgage program. You can pay this fee on completion if you wish, but most borrowers roll it into the loan amount to reduce their upfront cost.
Where can I apply for a VA home loan?
When considering a VA home loan, understand that you cannot get one directly from the Department of Veterans Affairs.
Although it is a government backed loan, you will need to turn to a private lender for funding.
A good starting point is your personal bank or credit union. But don't stop there. You should also reach out to at least three other VA approved lenders to compare rates and terms.
Getting a low interest rate can save you thousands over the life of the loan, and lower fees will help reduce your outlay on closing.
Review Your VA Loan Options (May 10, 2021)
Do I Qualify for the VA Home Loan Program?
In order to be approved for a VA home loan, the program eligibility requirements must be met.
The VA does not set a minimum loan value, but many lenders require a minimum loan value of 620. In addition, your income must be high enough to qualify for the loan amount you want, and VA home loans typically require a debt-income ratio no higher than 41%.
You must also meet the VA's occupancy requirements. The home must be a primary residence that you live in full time (i.e. you cannot fund an investment property or vacation home with a VA loan).
In terms of VA loan service requirements, you are likely qualified if any of the following are true:
You served on active duty for at least 90 consecutive days during the war. You served 181 days of active service in peacetime. You have served in the National Guard or in the reserves for at least six years. You are the surviving spouse of a service member who died in the war or who died of a service disability
VA loan benefits are nearly unbeatable for first-time buyers and current homeowners.
With low interest rates, no PMI, no credit limits, and no down payment, this program is one of the best for home buying or refinancing.
So if you meet the service requirements listed above, the first thing to do is to check your VA mortgage eligibility.
Check your new tariff (May 10, 2021)