For most borrowers, applying for a mortgage can be an intimidating task. Here are the easy-to-follow steps that you need to follow to complete the VA home loan process:
Choose a VA-Approved Lender
Although it might seem like any lender will do, you only need to dig a bit deeper to discover that not all lenders are the same. First, you need to look for VA-approved lenders because not all of them are. Secondly, some lenders focus on conventional loans while others focus on VA loans. Opting for a lender who specializes on VA loans will make the borrowing process easier.
Get a Certificate of Eligibility (COE)
With an experienced lender, you will be able to obtain a COE to prove that you meet the eligibility requirements for VA loans. It will also help the lender to know the amount of money that the VA can guarantee for your loan. You need to give your lender some information about your military service to get a certificate of eligibility.
Pre-Qualify Your Loan
Even though pre-qualifying is important, it is not a requirement. However, choosing to do this step will help you to avoid potential surprises later and save time. To get pre-qualified, you have to meet a VA loan professional to talk about your employment, marital status, income, and credit history.
Provide the complete details to avoid surprises during the underwriting process. Moreover, pre-qualification can help you to identify the areas that need work: debt-to-income ratio and credit score. A pre-qualification letter will give you an estimated figure as you start house hunting, but it is not a guarantee that your loan will be approved. To get a mortgage, you will need another approval during underwriting, which happens much later once you provide all the right documents.
Start House Hunting and Sign an Agreement
You will enjoy this step because you will be looking at different houses to find the best one for your needs. To get the most out of your benefits, you should consider working with a realtor who specializes in the VA loan process. Such benefits include getting the seller to pay certain costs and fees. As soon as you sign a purchase agreement, you can continue this process.
Lender Processes Application and Asks for Appraisal
To finish your first application, you need to have a signed purchase contract. When your lender gets the signed contract, he will then order the VA appraisal. Again, only a certified professional can perform appraisals that meet VA standards in homes that are being considered for a VA mortgage. The appraiser’s job is to confirm that the home’s value corresponds with the amount you are being asked to pay.
However, a home appraisal should not substitute an inspection, because home inspections focus on the condition of the property and code violations. As you wait for the appraisal, you should be submitting your documents to the lender. After the appraisal, if everything checks out, the lender will give you his stamp of approval.
Close on the Loan
After the underwriter approves your loan, it is time to move into your new home. Once you close on the property, it can be transferred legally from its previous owner to you. During closing, you need to sign documents that confirm your understanding and agreement of the loan terms. You might have to pay closing costs and provide proof of homeowner’s insurance.
Although the above steps do not always happen in order, they represent the process of acquiring a VA loan. When necessary, your VA-approved lender might need to take more steps to be completely sure of everything.
