Getting the Certificate of Eligibility for VA Mortgage

When seeking a VA home loan the first step is to determine your eligibility status. The second is completing the proper steps to get the Certificate of Eligibility, and the third is to determine which lender to use for processing your loan application.

Every VA loan requires a Certificate of Eligibility and this can be done in two ways. First is that you provide proof of adequate service and complete a VA Form 26-1880. The second is that your lender access what is called the Web LGY system which you’ll find that most lenders have access to. However if you’re wish is to have the process move as quickly as possible it might be best that you have the Certificate of Eligibility in hand when you visit your lender to complete an application.

Eligibility Requirements for COE

Eligibility for regular active duty military can be completed by having a statement of service completed that includes your social security number and the duration of your service that is signed by a superior. If you’re currently discharged you are required to provide documentation that proves that you’ve had at least six years of honorable service, this form is called a Standard Form 180.

The spouse of a veteran can also be eligible for a VA home loan if their spouse was deceased while on active duty or do to a service related disability. If this is the case, the spouse must contact the Atlanta Eligibility Center to get the Certificate of Eligibility. However the children of a living or deceased veteran would not be considered eligible for a VA loan program.

If you’ve had a VA mortgage in the past you might still be eligible for a future VA loan depending on whether or not you sold the previous property and it was paid off free and clear or if you had a VA loan that was paid in full.

There are a number of approved lenders that provide VA loans and it’s very likely that you can find one locally to handle your VA loan application. Just like on any other home loan, rate shopping is very important prior to deciding on a lender that is right for you.

Closing costs will also be a factor however it is important to know that all lenders are required to charge you what is called a VA Funding Fee. This fee is a small percentage of your final loan amount and is usually 1.25 to 1.5 percent of the total loan amount depending on your eligibility and your type of military service.

The loan officer will be able to determine the exact amount on your HUD statement and this fee can be financed into your VA loan. It is important to note that just because you’re a veteran it doesn’t mean you are guaranteed an approval for a VA loan. Also, the criteria for approval may differ from one lender to another.

Get Pre-Approved for a VA Mortgage Loan

The first step in the VA mortgage loan process is to get a pre-approval from a VA approved lender. In order to get pre-qualified, fill out an online VA loan application with a qualified VA lender and provide the relevant info required by them. You can also find VA approved lenders in all 50 states plus the District of Columbia on the VA.gov website.

VA Loan Pre-Approval Process

One thing to consider before submitting a pre-approval request is to determine the loan amount you want to borrow. Let’s say you request and receive a letter for the maximum allowed under VA mortgage limit for your location. Then you find the perfect home and it is for a sum significantly below the price set for you in your pre-approval letter which frankly is likely to be $417,000, the maximum for most locations.

Do you want the seller to know you are good for the full $417,000 when he or she is selling at, say, $317,000? That sounds like an invitation to pick your pocket between now and closing date. To avoid ending up in such a situation it is preferable to get two letters: the first would be for the maximum the lender would loan you (this would be of interest to the real estate broker) and the second letter would be for the exact price you want to offer on a specific home (this is the one the real estate broker would submit with the purchase offer). Most VA loan lenders will be more than willing to provide you with both letters of pre-approval.

If I get a VA loan, can a seller not accept?

Rejection is never an easy thing. If the seller reject the VA loan pre-approval you provide, it probably really means that the seller’s real estate broker has refused to work with a VA loan. After all, why would the seller care?

At closing they receive the funds as required by the real estate sale contract. But the VA loan guidelines do not allow for the brokers fees to come from the buyer. Oops. So what has to happen? Again, it’s pretty easy to predict—the seller tucks the broker’s fees into the price and away you go. So, the seller rejects the loan? I would predict the rejection has little or nothing to do with the loan and a lot to do with something that is unlawful like discrimination based upon race, gender, life style or even military status.

Don’t forget that for this whole VA loan process to hold together, the appraisal must be for a sum that matches or exceeds the sale price.

Take the time today to speak with one of our VA home loan experts about your situation and find out how the VA home loan program can help you.

Qualifying for VA Guaranteed Home Loan Benefits

VA Loans are basically home loans made by approved lenders to qualifying veterans, guaranteed by the Veterans Administration (VA).

The VA Guaranty protects lenders from losses in the event of default or foreclosure. Due to this significant incentive from VA to the lenders, veterans can purchase a home for no money down in most cases.

The differences between conventional loans and VA loans

VA loan qualifications are slightly different from conventional loan requirements. Conventional loans have no government guaranty or insurance. They can sometimes be more flexible if the loan amount exceeds VA mortgage limits. Conventional loan guidelines also usually require something a much higher down payment amount. Most of the VA purchase loans do not require a down payment and often don’t even require cash at settlement. These flexible eligibility requirements make qualification for a VA loan much more flexible and easy.

Legitimate VA loan uses

While the lenders can vary in what they do, the VA loans are good for the following:

  • Buying any residential property such as single-family or multi-family home, condominium, or townhouse.
  • Building a brand new residential property on a parcel of land.
  • Purchasing and then renovating a property in need of repair.
  • Installation of energy-efficient improvements to a home.
  • Refinancing an already existing VA guaranteed loan to get a better interest rate.
  • Buying a pre-fabricated or manufactured home.
  • Buying a mobile home
  • Buying a home and assuming the existing mortgage.

A qualified VA lender can help an eligible veteran with just about every type of loan. If they can’t help (for example some lenders do not loan on mobile homes), you can find another lender from the department’s website.

Things not to do during VA Loan processing:

  • Don’t buy anything on credit—except for the minimum use of your credit cards necessary to maintain your household, do not use them. Also no big purchases of boats, cars or other assets.
  • Don’t buy another house.
  • Don’t blow cash on anything except paying off debt—you may need to show its presence in the account. Worse still, if for some reason the VA loan cannot work, you may need these assets to apply for a conventional loan.
  • Don’t get wrapped up in a lawsuit, either as plaintiff or defendant.
  • Don’t move to a new place.
  • Don’t stop paying your rent and other bills.

Unique features of VA guaranteed home loans:

  • You can assign your mortgage to qualified borrowers.
  • You can receive a loan for a manufactured, including a mobile home.
  • You can buy and remodel a home before you take occupancy.
  • You can build a home from scratch.
  • You can reuse your eligibility.

Still have questions about VA loans or whether you can qualify for a VA loan from a great VA lender? Be sure to contact one of our VA home loan experts today.

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