VA Loan Program: 7 Steps to Getting a VA Home Loan

Veterans Affairs (VA) home loans have grown exponentially in recent years due to the downturn in the US economy. This economic recession has resulted in banks tightening conventional lending standards. Easier to obtain than traditional mortgages, they are one of the few mortgage options available to qualified borrowers with no down payment.

VA loans often offer lower interest rates than other types of loans and are available for the “full fair value” of a particular property. As a result, a deposit is not required, as is the case with other government programs such as the FHA, which require a minimum 3.5% deposit.

What is a VA Loan? VA loans are mortgages guaranteed by the U.S. Department of Veterans, but are not direct lenders. The loan is made through a private lender (of your choice) and guaranteed by VA as long as the guidelines are followed. What are the guidelines and who really qualifies for a VA loan? Below are the seven basic steps you need to take in order to get a VA home loan successfully.

First Step: Determine Eligibility

Most members of the military: Veterans, reservists, and members of the National Guard can apply for a VA loan. Military spouses who have died while on active duty or as a result of a disability related to service may also apply.Active members qualify after approximately six months of service.

Reservists and National Guard members must wait six years to apply unless they are called to active duty, where they are eligible after 181 days of service. eligible after 90 days of service. Credit applications may vary depending on your service status. Your VA regional office can help you with further questions about eligibility.

After you have pre-determined your eligibility, the first step for prospective borrowers is to obtain a Certificate of Eligibility (26-1880) before applying for a loan. At this point, you must select an accredited VA loan specialist who will help promote the loan process, including accessing and submitting this online eligibility form.

Step 2: The Pre-Approval Process

Before starting Step 2 of the VA credit process, it is important that you have your credit report pre-approved with all three credit bureaus to see where you stand on your FICO credit score. You should carefully review the report for errors and / or identity theft and resolve these issues in advance. Although Veterans Affairs does not require a VA loan score limit, most lenders have internal requirements and require a score of 620 or higher.

Once you complete this important task, give this information to your VA loan specialist. They can answer all of your questions and help you determine the loan amount to which you are eligible under a pre-approval process. Most real estate agents require the pre-approval process before they will work with you to find a home. It is designed to give you security and a price range that you can afford based on a pre-approved amount.

To obtain a VA loan, the law requires that:

• The applicant must be a qualified veteran with available rights.

• The loan must be for an eligible purpose. • The veteran must move into or intend to move into the property within a reasonable time of the completion of the loan.

• The veteran must have a satisfactory credit risk.

• The veteran and his spouse’s income, if any, must demonstrate that it is stable and sufficient to meet mortgage payments, meet the cost of owning a home, attend to other obligations and expenses, and sufficient to support them of the family.

Your VA loan specialist can discuss other specific earnings and other qualifying requirements. According to the VA Loan Quick Start Guide, VA loan limits generally do not exceed $ 417,000 (except for VA jumbo loan maximums in designated high-cost countries; calculations may vary).

Step Three: Decide on a Home and Make an Offer

Select a real estate agent who will work with you carefully to find the home you want. After you have found the house based on your personal and financial criteria, make your offer. too low or too high as you always want to be one step ahead of the bid but don’t want to risk overpayment for the property. After bidding, you will be asked to pay a deposit ($ 500.00 is common) on the property.

Please note when submitting your offer that certain fees apply, e.g. B. Brokerage, lender fees, buyer’s commission, or brokerage fees that the seller may have to pay because the VA does not allow fees to be charged to the experienced buyer. It must be included in the cash / purchase price to be acceptable to the seller.

Step 4: Signing the sales contract

It is recommended to include two emergency provisions in the sales contract or change them: 1) at the time of financing and 2) at the time of review. Fact: A “prequalification letter” doesn’t necessarily guarantee funding, so you should be insured in case you fail. However, if you followed the steps outlined in Step 2 and it was “pre-approved” you should be fine. The pre-approval process is a more comprehensive review of your financial history and credit history by your VA loan specialist. Once this is done, your lender will give conditional approval for your loan amount.

A home inspection can be a critical emergency regimen that gives you the opportunity to step back if the repairs are costly and significantly lower the property’s market value Do you have the expertise that a certified home inspection can see?

The VA appraiser’s job is to ensure that the house meets the minimum property requirements. He / she determines the fair market value for the house and issues a fair value certificate. However, this VA assessment is not a substitute for a detailed home inspection. Although optional, it is highly recommended that your offering be made contingent on a detailed home inspection.

Fifth step: Offer accepted

Contact your lender immediately and let them know that your offer has been accepted. Road to home ownership! If you have not already done so, you will need to submit tax returns, pay slips, and bank statements for the past two to three years.He / she will help you fill out your application and submit it for processing and approval.

The lender then orders a VA rating and a certified home inspection. Your VA loan specialist will complete the assessment and do a full review and review of your credit, earnings and assets for a “Clear to Close”. This begins on the date, time and place where all necessary documents for the title transfer are signed.

Step 6: VA Financing Rates

The VA Financing Rate is an integral part of the VA home loan program. This one-time core funding fee is required to be paid to VA by all but a few exempt veterans. The no-down benefit program requires a deposit of e 2.15. A deposit of at least 5 percent but less than 10 percent requires € 1.5, and a deposit of 10% or more requires € 1.25.

No deposit is required for subsequent users of the VA loan service 3.3 e and a deposit of at least 5 percent but less than 10 percent require 1.5 e. And a deposit of 10% or more requires 1.25 e.

For first-time users of the Reserve / National Guard category without a deposit, a deposit of 2.4 eA of at least 5 percent is required, but for less than 10 percent a deposit of 1.75 e is required, and for a deposit of 10% or more a deposit of 1.5 e is required. For downstream users of the Reserve / National Guard category, no deposit requires a 3.3 eA deposit of at least 5 percent, for less than 10 percent a deposit of 1.75 e and for a deposit of 10% or more a deposit of 1.5 . The financing fee can be in cash or in the loan.

The following are exempt from paying the funding fee:

• Veterans who would be entitled to compensation for service-related disabilities if they had not received a retirement benefit.

• Veterans who would be entitled to service-related disability compensation if they had not received retirement benefits.

• Surviving spouses of veterans who died in service or from service-related disabilities (whether those surviving spouses are themselves veterans and have their own right to the loan).

More good news! Unlike FHA and conventional loans (less than 20% less), VA loans don’t require mortgage insurance.

Step 7: Approval and Closing

If your lender is eligible for automatic processing under the VA Lender Appraisal Processing Program (LAPP), once the VA appraisal is received, the loan can be approved and closed without waiting for the VA Verification. Verified by VA, the lender forwards the application to the local VA office, which informs the lender of its decision.

After receiving VA approval, you (and your spouse) will take part in the loan process. Your lender or graduate attorney will discuss the terms of the loan and its requirements, as well as the location and type of monthly payments. Documentation and ownership pass to you. You have completed the seven steps to getting a VA loan and are now a homeowner!

Benefits of the VA Loan Program – Now and in the Future.

The VA Loan Program is effectively the way that American governments and Americans thank those who actively serve or have served in the military. The benefits of the VA loan program go beyond providing a home loan as they can also be used to refinance and repair an existing home.

Another benefit of having a VA loan is the support it provides to borrowers who may be struggling. When the borrower of a VA loan is unable to make the mortgage payment, the VA negotiates on behalf of the borrower. They have a dedicated staff who work nationally to help veterans who are experiencing financial difficulties. These financial advisors can help borrowers negotiate payment plans, loan modifications, and other alternatives to foreclosure.

We are aware that many of our troops will return from abroad in the near future and that there are veterans who have served our country in the past and are now looking for a home. Rest assured, VA accredited lenders are honored to work on your behalf and to fund your home and the bright future you and your family so generously deserve.

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