Many veterans may find the loan application daunting. This anxiety or lack of motivation closes their door to one of the most advantageous mortgage programs today. If you or someone you know is having trouble with getting started on acquiring a VA home loan, this article can help steer you in the right direction and move into your new home in no time.
The following outlines the step-by-step process of getting a VA home loan from qualifying to closing.
If you are unsure of your status as an eligible VA borrower, check via the VA website. Typically, those who are eligible include: veterans and active duty servicemen, National Guard members, Reservists, surviving spouses of deceased vets, discharged and retired servicepersons, cadets at the US Military, Air Force or Coast Guard Academy, midshipmen at the US Naval Academy, as well as officers of the National Oceanic and Atmospheric Administration. You must meet the service requirements charted by the VA.
Select a VA approved lender
Not all lenders are created equal. Others concentrate more on conventional loans, while others are specialty originators of a specific kind of loan. Find a lender who has extensive knowledge in originating and processing VA loans.
Obtain your COE
Your COE or Certificate of Eligibility is a document that confirms your service and certifies you as an eligible borrower for the program. All VA loans require a COE except for the Interest Rate Reduction Refinance (IRRRL) loan program, otherwise known as VA Streamline Refinance. Your lender can help you obtain a COE through a fast online cross-referencing platform.
Pre-qualification is an important step in getting a VA loan, but not strictly required. However, prequalifying can help you get a better understanding of the whole VA process and can save you of potential surprises in the future. During this step, the lender may pull your credit, (although this is not a requirement for VA loans) to see how much you would qualify for. You may also have to provide necessary financial documentation for pre-approval. It is good to ask questions and provide as much information during pre-qualification so your lender can help you choose the best loan option that suits your needs.
Find a Home
You are now ready to go home hunting once you’ve obtained your COE and pre-qualification letter. Work with a real estate agent who is knowledgeable about VA processes and who can help you negotiate seller-paid fees. Once you’ve settled on a choice and both parties reach an agreement, you can now sign a purchase agreement.
Complete Your Loan Application
Forward the purchase agreement to your lender. Once this is available, they will now order a VA appraisal. The home must meet the VA’s minimum property requirements. Because the VA appraisal does not include home inspection, it is recommended that you commission it on your own to know about the home’s current issues and defects that needed repair and fixing before the sale can move on.
While the appraisal is going on, you must get busy submitting all the necessary documentations and requirements asked by the lender. Once the appraisal is done and it is verified that you qualify for the loan, the lender will then give a stamp of approval.
Note that the VA IRRRL program does not require appraisals to be done.
At closing, everything is finalized. You will have to sign necessary documents for the legal transfer of property. You must read the fine print, possibly prior to the meeting, and make sure you understand the terms of the loan. You might need to provide proof of homeowners insurance and pay closing costs (if required). After completing the signing, you are now ready to move in.