Applying for the Loan
Guide to VA Loans
VA-guaranteed loans are obtained by making application to private lending institutions.
Lenders may be found by asking in the community in which you live what firms in the area make home loans. This information may be obtained from the local chamber of commerce, by looking in the telephone directory under "Mortgages," or by inquiring at banks, savings and loan associations, mortgage companies, real estate brokers' offices, and other public and private lending agencies. The local VA regional office will also provide a list of lenders who are active in the program.
Most mortgage lenders will have the forms and other necessary papers to apply for a Certificate of Eligibility and for the loan and will help you fill them out. Any lender who does not have the forms may obtain them from the nearest VA regional office.
If you have a Certificate of Eligibility, you should present it to your lender when making your loan application, because the lender will want assurance that you are eligible before accepting the application. However, a lender will undoubtedly discuss the possibility of making a VA loan to you without seeing the certificate. In fact, many lenders will assist you in applying for a Certificate of Eligibility. So, even if you have not obtained a certificate, you should not delay making an application to a lender for a loan just for this reason.
To reduce delays in the processing of the loan, you should be prepared to give the lender the complete names and addresses and your employee identification numbers for present and past employers covering a 2 year period. You should also have available the location and account numbers for savings and checking accounts and all open and recently closed debts and obligations.
VA LOAN QUESTIONS AND ANSWERS
1. If a lender is unwilling to accept a veteran's application for a loan, what should the veteran do?
The veteran should see another lender. The fact that one lender is not interested in making the loan the veteran wants does not mean that other lenders will not make the loan.
2. How are VA loans processed?
There are two ways a lender may process VA home loans-on a "prior approval" or "automatic" basis.
When the loan is processed on a prior approval basis, the lender takes your application, requests VA to appraise the property, and verifies your income and credit record. All this information is put together in a loan package and sent to VA for review. If VA approves the loan, a commitment by VA to guarantee the loan is sent to the lender. The lender then closes the loan and sends a report of the closing to VA. lf the loan complies with VA requirements, VA issues the lender a certificate of guaranty.
In automatic processing, the lender still orders an appraisal from VA, but has the authority to make the credit decision on the loan without VA's approval. The biggest difference between prior approval and automatic processing is the time saved by avoiding the need to await VA's approval before loan closing.
All lenders do not have the authority to process loans on the automatic basis. Banks, savings and loan associations, and certain other lenders such as mortgage companies which are approved by VA have the privilege of processing VA guaranteed loans using the automatic procedure.
Lenders approved to participate in VA's Lender Appraisal Processing Program (LAPP) are generally able to expedite the processing of VA appraisals.
3. What should a veteran do while waiting for loan approval?
Sometimes it may take longer than you might expect for the lender or VA to process your loan application. For instance, your current or former employer may be slow in returning an employment verification form, or it may take some time to obtain a credit rating from out of State creditors. Occasionally, the application VA receives from the lender is incomplete in some important aspect and requires that VA ask the lender to furnish additional information before a final decision can be made. Ordinarily, you should plan on an average of 4 to 6 weeks to obtain a decision on your application.
In any case, information on the progress of your application should be obtained from the lender, who will be most aware of developments as they occur.
It is most important that you not make any commitments based on an expected approval of your loan. You should not, for example, give notice to your landlord until the loan is actually approved by VA (or by your lender if the automatic processing procedure is used). Generally, it is not advisable to move into the home before the loan is approved. If for some reason the loan is not obtained, you could be faced with additional expense and inconvenience.