To apply for a VA loan, first look for a lender that specializes in this benefit program. Your lender will help determine if you meet service requirements, gather your personal financial information, point out credit issues and provide specifics on your home purchasing power.
Applying for a VA loan can be broken down into this straightforward process:
To be fully prepared, we cover the major parts of the VA loan application process below.
Once you find a home that meets your preferences, needs and budget, it’s time to finalize your VA loan application.
No matter what lender you choose, you will be required to provide information about yourself, your employer and your spouse or partner if they are a co-borrower on the mortgage. Documentation required for your VA loan application is 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.
Potential homebuyers should know that 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.
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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.
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.
After review of the file, the underwriter will provide you with a clear to close, conditional approval or denial.
Borrowers should understand that receiving a conditional approval is very common and this generally means you must provide additional documentation before moving forward. Things such as changes in employment status and large bank account deposits may trigger a conditional approval.
It is important 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!