If you are a veteran or a qualifying military spouse, you are entitled to a VA loan. A much-deserved aid in purchasing a home after military service, a VA loan offers several advantages and contrasts with the traditional mortgage systems.
The VA loan’s biggest advantage is its lower down payment options. In fact, you might qualify for a VA loan with zero down payment, even if you have had a history of past foreclosures or your credit score isn’t very good.
Furthermore, the government guarantees VA loans, so it is comparatively easier to qualify as there’s little risk for lenders. Nevertheless, securing a VA loan can be confusing at times. So, it’s important you understand them to reap the full benefits. Here’s a guide to VA loans and how you can secure yours for optimal financial benefit.
What Is A VA Loan?
Backed by the federal government and insured by the United States of America. Department of Veteran Affairs, VA mortgage loans are designed to assist veterans and active-duty service members. Private lenders usually issue these loans with the government backing the enforcement of the $0 down payment. VA loan can be used to:
- Buy a home
- Build a home
- Purchase a condo in a VA-approved building
- Buy and improve a home
- Purchase a lot or a manufactured home
- Make energy-efficient improvements to your existing home
- Refinance an existing loan
Once you are eligible, VA loans are relatively easy to qualify for as there is no down payment, the maximum limit on how much you can borrow based on your income, and minimum credit scores involved.
5 Easy Steps To Apply For The VA Loan
Do you want to apply for the VA loan? Take a look. Here are the five easy steps which you need to follow to apply for the VA loan.
1. Find A Certified Lender
Typically, lenders approved by the U.S. Department of Veterans Affairs can provide VA loans. So, your journey toward securing a VA loan application process begins with finding a VA-approved authentic lender.
Not all private lenders specialize in VA loans, so look for a VA loan specialty lender to ensure they are experienced in this type of mortgage financing.
Once you find the right lender, schedule a consultation and let your home lending advisor know you are interested in obtaining a VA home loan. The lender will then brief you about the various mortgage options and the home loan requirements. You could even calculate your VA loan amount beforehand to start your budgeting process.
2.Get A Certificate Of Eligibility
In the next step, your lender will provide you with a COE (Certificate of Eligibility). A COE is a document that shows your lender you possess the active-duty service or service history required to qualify for a VA loan. They also inform the lender how much the VA will back for the loan amount.
Alongside service requirements, your eligibility for a VA loan is determined based on the following factors:
- You are an unmarried spouse of the service member who died in service
- Your credit history is satisfactory
- You have proof of employment and income
The application for a COE can be completed online or by mail. It entails sharing information about your military service, finances, and other personal information. In most cases, the online process works faster and is easier. If you require assistance, you can reach out to your lender.
While it isn’t mandatory, pre-qualifying is a significant step to consider as it ensures you have realistic expectations for your house hunt. It can also give you a heads up on any aspects of your finances that need improvement before going through the entire loan approval process.
Ideally, you should get pre-qualified for your loan once your lender has your COE in hand. Typically, lenders make it easy for you to complete this process online by offering some basic financial information and details about your home loan needs.
Nevertheless, remember that getting pre-qualified does not guarantee that the exact amount will be offered to you during the loan approval process.
Now you have reached the most exciting part of the VA loan process when you search for your dream home. If you have already pre-qualified for your loan, you will have a more specific price range for the searching process.
Find a real estate agent specializing in VA loans who can assist you with your search. Remember, not all sellers are open to VA loans. You should find an experienced VA loan real estate agent who can help you navigate the best sellers for you. They will also be skilled at negotiating fees with potential sellers to get the most for your loan amount.
5.Application Processing And Closing
Once you’ve found your ideal home and agreed on a price, the lender will start finalizing your VA loan. At this stage, the home you choose to buy must be appraised by an assessment analyzer accreditation by the VA through your lender, and a home inspection should be conducted. Once the appraisal and inspection are successfully completed, the underwriter can proceed with approval.
Closing on your home is the final step when you sign all the required loan documents and receive the keys to your new home.
Is A VA Loan Right For You?
If you don’t want to pay mortgage insurance, don’t have perfect credit, or wish to buy a home without a down payment, a VA loan might be the ideal choice for you. Nonetheless, you will require proof of military service to be eligible, and you might have to pay a funding fee that could add a high cost to your loan. Learn the details surrounding your VA loan options to make the best decision for you and your circumstances.