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.
What You Need for the VA Loan Application Process
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:
- A government issued photo ID
- Recent pay stubs
- Two years’ worth of W-2 statements
- Bank, investing and retirement statements
- For self-employment, 1099 or rental income, the last two years of federal tax returns
- Copy of your DD-214
- For active military, a statement of service letter signed by your commanding officer
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.
Step 1: See if You’re Eligible
You are likely eligible for a VA home loan if you meet at least one of the following conditions:
- You served 90 consecutive days of active service during wartime
- You served 181 days of active service during peacetime
- You served at least 6 years in the National Guard or Reserves
- You are the spouse of a service member who has died in the line of duty
- You are the spouse of a service member who has died as a result of a service-related disability
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:
- Apply through a lender (most lenders will have the ability to obtain your COE for you)
- Apply online (through eBenefits.va.gov).
- Apply by mail (Complete VA Form 26-1880 and mail to: VA Atlanta Regional Loan Center. Attn: COE (262) P.O. Box 100034. Decatur, GA 30031.)
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).
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Step 2: Contact a VA Loan Lender
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.
Step 3: Get Preapproved for your VA Loan
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.
Step 4: Make an Offer on a Home
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.
Step 5: Finish Your VA Loan Application
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.
Step 6: Close on Your Home
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!