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The VA Loan Process Timeline: Preapproval to Closing Steps

Over 300,000 Veterans and service members completed the VA loan process last year to buy a home, taking advantage of the VA loan's $0 down payment benefit and the mortgage industry's lowest average interest rates.

While there's no universal VA home loan process, most military and Veteran homeowners took the following steps to get the keys to their new house:

  1. VA Loan Preapproval
  2. House Hunting with a VA Loan
  3. Going Under Contract
  4. VA Loan Underwriting
  5. Closing on a VA Loan

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

1. VA Loan Preapproval

Getting preapproved for a VA home loan before seriously shopping for a house is crucial. Having a preapproval letter in hand from a top 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. Knowing you’re able to afford the home can give sellers peace of mind and make your offer more attractive.

How to Get Preapproved for a VA Loan

When you're ready to start your VA loan preapproval, contact an approved VA home loan lender to begin the process. Top VA loan lenders can confirm your VA loan eligibility by pulling your Certificate of Eligibility through the VA's automated system.

A Certificate of Eligibility is a document issued by the VA that verifies a borrower's service history and duty status. Obtaining a Certificate of Eligibility makes the process easier and faster.

Assuming you meet VA service requirements, lenders might also check the following financial information to complete your VA loan preapproval:

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

Lenders also 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

VA loan lenders can often preapprove you for a VA loan within a few days of submission if you have all the necessary documentation. Of course, if this isn’t the case, your lender can give you a checklist of what they need to issue your preapproval.

What's the difference between preapproval and prequalification?

Loan applicants often interchange the terms preapproval and prequalification, but they mean two slightly different things.

A preapproval is a more robust and 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 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, income changes, and credit score shifts can trigger a need for a newly issued preapproval letter.

After receiving a preapproval letter, you're ready to start the fun part, home shopping!

2. House Hunting with a VA Loan

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.

Veteran-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, the property must meet VA minimum property requirements in each circumstance. The right agent will know what to look for and can work directly with your lender to ensure your VA loan timeline stays on track.

If you struggling to find an agent, ask your lender who they recommend in your area.

3. Going Under Contract

With a trusted agent and 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 excellent news and worth celebrating, but there are still a few steps left until you can call the home yours:

At this point, your lender should give you a better idea of what closing costs and fees to expect, such as title or loan fees. There are also specific non-allowable fees that VA borrowers cannot pay. Some buyers even ask sellers or lenders to cover some 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 timeline—underwriting.

4. 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 you can afford the home at the price shown in your home contract.

Typically, lenders employ an Automated Underwriting System (AUS) to assess a borrower's creditworthiness quickly, streamline the loan approval process, and reduce the likelihood of human error. They will also likely use an AUS when you apply for preapproval.

However, some borrowers with unique financial circumstances, such as those with no credit history, may not be approved by an AUS. If an AUS denies you, it's not the end of the road.

You can request manual underwriting, which is when a human underwriter takes a closer look at your financial profile. This process takes longer but can result in a more favorable result for the borrower.

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

5. Closing on a VA Loan

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

The law requires that you receive a Closing Disclosure from your lender at least three business days before your loan closes. 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 do a final walkthrough of the property just before closing to ensure everything has stayed the same since going under contract.

What to Expect on Closing Day

You're almost there; there's just one part: closing day.

A closing day appointment can take 1-2 hours, depending on the nature of the purchase agreement between the buyer and seller. However, it's recommended to block more time to be safe and take your time reviewing the documents.

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, mortgage, or deed of trust in the local property records. When registered, 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 most important step to the VA loan process timeline? Get the keys to your new home; it's time to celebrate!

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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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