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The VA Loan Process: Steps from Preapproval to Closing

Over a million Veterans and service members completed the VA home loan process last year while taking advantage of the VA loan’s $0 down payment benefit and the mortgage industry’s lowest average interest rates.

While there’s no one-size-fits-all process, most military and Veteran homeowners took the following steps on the way to getting the keys to their new house:

  1. VA loan preapproval
  2. House hunting
  3. Get under contract
  4. Loan underwriting
  5. Closing

If you’re a first-time homebuyer, the homebuying process can feel daunting, but the first step is simple -- VA loan preapproval.

VA Loan Preapproval

Savvy homebuyers know that getting preapproved for a VA home loan before seriously shopping for a house is crucial. Having a preapproval letter in hand from a trusted VA loan lender offers two advantages:

  1. You will know how much you can afford
  2. Sellers and real estate agents will take your offer seriously

In a competitive homebuying market, having the backing of a lender preapproval letter can make the difference between getting under contract or having your offer declined. It gives the seller peace of mind knowing you’re able to afford the home.

How to Get Preapproved for a VA Loan

When you’re ready to get started on your VA loan preapproval, contact an approved VA home loan lender to start the process. Top VA loan lenders are able to confirm your VA loan eligibility by pulling your Certificate of Eligibility through the VA’s automated system.

Assuming you meet VA service requirements, lenders will gather the following to complete your VA loan preapproval:

  • Employment history
  • Credit report
  • Current income and financial assets
  • Current monthly debt

For preapproval to happen, lenders need an array of documents to verify a borrower’s financial information. Such documents can include, but are not limited to:

  • Copy of government-issued photo ID such as a driver’s license
  • Recent pay stubs
  • W-2 statements and federal tax returns from the last two years
  • Divorce decree and/or child care statement specifying costs

Of course, if you don’t have these documents right away, your lender can give you a checklist of what they need to issue your preapproval.

How long does it take to get a VA loan preapproval?

Top VA loan lenders can often get you preapproved for a VA loan immediately after receiving all the documents they need to verify your eligibility and financial status by using an Automated Underwriting System (AUS). Typically, the longest part of the preapproval process is simply gathering your financial documentation.

With a preapproval letter in hand, you’re ready to start the fun part, home shopping!

House Hunting

Finding the perfect home for you and your family can take time, but the process can be a lot of fun, especially with a seasoned real estate agent by your side. Finding an agent who has worked with Veteran homebuyers and understands the VA home loan program is critical.

Military-friendly real estate agents will know how to leverage the benefits of VA home loans and look for properties that fit within the VA’s requirements. For example, VA loans can be used to finance various types of properties such as:

However, in each circumstance, the property must meet VA minimum property requirements. The right agent will know what to look for and can work directly with your lender to ensure the whole VA loan process goes smoothly.

If you don’t have an agent in mind, ask your lender who they recommend in your area.

Going Under Contract

With a trusted agent wielding your VA loan preapproval letter, it’s only a matter of time before a seller accepts your purchase offer. Having your offer accepted is often referred to as getting “under contract,” as it’s the formal kickoff to purchase negotiations between the buyer and seller.

Getting your offer accepted is great news and worth celebrating, but there are still a few steps left until you can call the home your own:

  • Share your contract details with your lender
  • Order a home inspection (recommended)
  • Have your lender will order a VA appraisal

At this point, your lender should be able to give you a better idea of what closing costs to expect, such as realtor fees, title fees or loan fees. Some buyers ask sellers to cover a portion of these closing costs as a part of ongoing negotiations.

While you’re sorting out the purchase agreement details with the seller, your lender will move forward with the next step in the VA loan process -- underwriting.

VA Loan Underwriting

Underwriting is the process lenders use to turn your VA loan preapproval into an approved (and thoroughly vetted) mortgage. Your lender will begin the due diligence to ensure that you can afford the home at the price shown in your home contract.

As a borrower, your role is to provide any additional documentation your lender needs promptly to avoid delays on the way to closing. It’s also important to avoid major changes in your income or debt, such as opening a new credit card or getting an auto loan. Talk to your VA loan team if you have any questions along the way.

The underwriting team will wait for the VA appraisal to come back before finalizing your loan file and granting a “clear to close.”

Closing on a VA Loan

Closing on your mortgage is a huge accomplishment, and the VA loan closing process is very similar to other mortgage closings. It starts with your Closing Disclosure.

The Closing Disclosure

The law requires that you receive a Closing Disclosure at least three days prior to your loan closing. Your Closing Disclosure will show what you will owe on closing day, if anything, including:

  • Down payment
  • Agent fees
  • Title fees
  • Other settlement costs

Your lender will review this document with you and answer any questions you may have so you are fully aware of what you owe and why.

Buyers often choose to do a final walkthrough of the property just before closing to ensure nothing substantial has changed since going under contract.

What to Expect on Closing Day

Be ready to sign your final paperwork. Your title company will walk you through each section of the closing documentation they’ve prepared on your and the seller’s behalf. When the documents are in order, you will pay the down payment balance, if any, and your share of the closing costs.

After the closing, the closer will record the deed and mortgage or deed of trust in the local property records. When recorded, the deed will be mailed to you as grantee and the security instrument to the lender. The security instrument remains on record as a lien against the home until your loan is paid off.

The last and more important step to the VA loan process? Get the keys to your new home; it’s time to celebrate!

Frequently Asked Questions

How long does it take to get a VA home loan?

The VA loan process typically takes 30-45 days from preapproval to closing for homebuyers. VA streamline refinancing can be a faster process, often closing in half the time. Both VA purchase and refinance timelines are comparable to conventional mortgages.

What’s the difference between preapproval and prequalification?

A preapproval is a stronger, more trusted estimate of what a lender is willing to lend you because it is based on your proven credit and financial history. Prequalifications are often used as rough estimates to give borrowers an idea of what they could be preapproved for without requiring a credit check.

How do you start the VA loan process?

The first step to starting your VA loan process is getting preapproved with a reliable mortgage lender. A VA preapproval letter will give you an idea of what you can afford, so you can shop for homes in your price range.

How long are VA preapproval letters good for?

60 to 90 days is the general timeline for how long your VA preapproval letter accurately represents your purchase power. Any large purchases, changes in your income, and shifts in your credit score can trigger a need for a newly issued preapproval letter.

How long does closing day take?

Depending on the nature of the purchase agreement between the buyer and seller, a closing appointment can take 1-2 hours, assuming everything goes smoothly. However, it’s recommended to block more time to be safe and take your time reviewing the paperwork.

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ICB Solutions is a division of Neighbors Bank, which is an affiliate of Mortgage Research Center, LLC dba Veterans United Home Loans.

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