Applying for a VA loan to purchase a home can be an intimidating process, especially for first-time homebuyers. Follow these steps to apply for a VA loan with ease and purchase the home you deserve.
Once you’ve determined that you’re eligible, the application process for a VA home loan should take around 40 days to complete.
Before you begin, it’s important to know what you’ll need to complete the application process for a VA loan. Lenders will require you to provide documentation used to verify your employment history, creditworthiness and your overall financial situation.
These documents may include:
Your lender may require additional documentation depending on your unique financial situation.
Important Tip: It is vital to complete your VA loan application as accurately as possible. Not disclosing key facets about your finances or refraining from providing requested documentation will delay the VA loan process and may result in loan denial.
You are likely eligible for a VA home loan if you meet at least one of the following conditions:
Apply for a Certificate of Eligibility (COE), as this confirms to lenders that you qualify for the VA home loan benefit. You can apply for your Certificate of Eligibility in one following ways:
You must have satisfactory credit, sufficient income, and a valid Certificate of Eligibility (COE) to be eligible for a VA-guaranteed home loan. The home must be for your own personal occupancy. The VA states that you are entitled to the VA mortgage benefit if you're active duty or have separated from military service (with other than dishonorable discharge).
It’s important to contact a VA home loan lender early on in the process, so you can start the preapproval process. Having a preapproval letter from a lender will help tremendously when it comes time to place an offer on a home.
Important Tip: Check out this list of the top VA loan lenders, so you can compare and choose the right lender for you.
Provide the lender with copies of your financial documents including your photo ID, pay stubs, W-2 statements and federal tax returns for the past 2 years, and a divorce decree or child care statement specifying costs if applicable. Once all documents are gathered and are satisfactory, your lender will preapprove you for the VA loan.
VA lenders rely on an Automated Underwriting System (AUS) – a computer program that instantly evaluates a borrower’s eligibility – to determine a buyer’s preapproval status.
Not every borrower receives AUS approval; however, this does not mean your VA loan is denied. Instead, your VA lender may consider a manual underwrite, which means a person instead of computer program will be crunching the numbers on your loan file.
Those requiring a manual underwrite generally have a lack of credit history, late mortgage payments, bankruptcy or foreclosure showing on their credit report and may face more stringent credit and income requirements. Click here to learn more about the preapproval process.
Find the home that’s right for you and your family, and make an offer on the home using your VA loan preapproval letter you received from your lender. Once the seller accepts your offer and you have a contract in-place, notify your lender to begin the next step towards homeownership.
Work with your lender to finalize your VA loan application by providing additional information required including your home purchase contract.
Before final approval and receiving a clear to close, your VA loan application is submitted to underwriting. Underwriting is a final review of your loan file to ensure everything meets requirements set forth by the VA and the lender itself.
During the underwriting process your lender will need to validate your personal and financial information, which may require additional documentation. After review of the file, the underwriter will provide you with a clear to close, conditional approval or denial.
Before closing, your lender will work with you and the seller to schedule a VA home appraisal. This is a required step in order to approve your application for a VA home loan.
Important Tip: It is imperative that you provide any requested documentation as quickly as possible to ensure you hit your closing date.
Once your loan file receives a clear to close, you’re all set and only have to wait until closing day to sign your loan paperwork and move in!