The VA loan carries an unfortunate myth that it takes too long to process. Normally, this isn’t the case. It takes just about as long as many other loan programs. What it really depends on is the lender’s workload and how well you respond to the lender’s needs.
On average, you can get approved and close on a VA loan in 30 to 45 days. Again, this will vary by lender and even by borrower, though. Below are the factors that affect your approval time.
Did you Get Pre-Approved?
Getting pre-approved for a mortgage not only helps you when you want to bid on a home, but it helps get your ‘official’ loan approved and closed faster. When you go through the pre-approval process, the lender does some of the work ahead of time. You likely had to provide your income documents, allow the lender to pull your credit, and your asset statements to get pre-approved. This cuts the underwriters work in half when you sign a purchase contract and are ready to process your loan.
If you don’t get pre-approved, the underwriter has to start from scratch. You actually don’t even know if you’ll get approved if you failed to get a pre-approval. You might have a pre-qualification, which comes from the loan officer. You give the loan officer a general idea of your income, debts, and credit score and he gives you an estimate of the amount of loan you can afford – not how much loan you are approved to get.
How Fast do You Respond to the Underwriter?
Once you turn in your documents along with a purchase contract, your job isn’t over. The underwriter will go over these documents and decide if he needs more documentation. Sometimes questions pop up after looking closely at your pay stubs. For example, if you have deductions coming out of your paycheck that the underwriter cannot decipher, he may ask questions. Underwriters often carefully evaluate your asset statements too. If there are any red flags popping up after evaluating them, there may be a need for further documentation.
It’s up to you to stay in contact with your loan officer to see what the underwriter needs. Then, it’s your responsibility to get him the documentation he needs quickly. The longer you take, the more your file gets pushed to the back of the line. This could delay the amount of time it takes to get your loan approval.
How Quickly Does the Appraisal Get Done?
Unfortunately, you don’t have a lot of say in how long the appraisal takes. It’s up to the lender to order the appraisal, but then the appraiser and the seller have to work out a mutually convenient time to see the home. Once the appraiser visits the home, he has to write up a report and give it to the lender.
It’s a good idea to talk to the appraiser that your lender recommends to see what his turnaround time is like. If it is going to take too long, you may want to discuss your options for using another appraiser with your lender. You have to make sure it’s an appraiser that your lender approves, though, so don’t go and choose an appraiser on your own. This may only delay the process.
What’s the Home’s Condition?
Once the appraisal is done, you hope that the home is in good enough condition to pass the VA Minimum Property Requirements. If the appraiser finds that it isn’t, you may have to go back to the seller and negotiate the repairs. This process could delay your mortgage approval. First, you have to get the seller to agree to make the changes. Then you have to wait until the changes are complete and the appraiser can come out and confirm that the home now passes the VA appraisal.
Overall, the VA loan process is quick, but as you can see, it depends on many factors. The best thing you can do to move things along is have open lines of communication. Talk to your lender, the seller, and any third parties involved in the process. When you all work together, you can get your VA loan approved and closed quicker.