A VA loan is a mortgage loan that’s backed by the Department of Veterans Affairs (VA). Reserved for those who have served or are presently serving in the armed forces, VA loans are just one of the many benefits set aside for those who risk their lives to serve our country. Since these mortgages don’t always require a down payment* or private mortgage insurance**, VA loans are booming in popularity and many active-duty and retired veterans may be curious about how to get a VA home loan. VA loan programs may be used to purchase homes or condos, refinance an existing VA loan, or install energy-saving improvements. From finding a VA-approved lender to making sure you’re eligible, here are a few things you need to know about getting a VA home loan.
VA Loan Qualifications: Do I Meet Them?
If you’re a member of the military, a veteran, a reservist, or a member of the National Guard, chances are you’re already eligible to apply for a VA loan. If you’re a spouse of a military member who died while on active duty or as a result of a service-connected injury or disability, you may also apply. Beyond that, there aren’t many limitations or restrictions.
Find a VA-Approved Lender
Once you’ve determined your eligibility for a VA loan, the next step in the process is finding a lender that’s approved by Veterans Affairs. It’s important that your lender is well-versed in everything VA for a few reasons: they’ll be able to point out any credit issues you may have that could impact your chances of getting a loan, they’ll help you decide how much home you can afford, and they’ll get you pre-approved for a loan. There are a variety of ways to find a VA lender, including asking friends and family for recommendations, or searching on the VA website. Just like traditional loans, it’s never a bad idea to shop around and talk to several different lenders before making your final choice.
Get Pre-Approved for a Loan
As previously mentioned, a VA-approved lender will help you get pre-approved for a loan. This is beneficial for two main reasons: it’ll save you time since you’ll have a general idea of how much home you can afford before you start house hunting, and it’ll prove to the seller that you’re a serious buyer. If there are multiple offers on a property and only one is pre-approved for the loan, chances are the seller will be most comfortable working with the party that’s gone through the effort of getting pre-approved. Knowing in advance what you can afford offers an added level of security, and that security can go a long way in the search for your future home. A HomeBridge Mortgage Loan Originator can help you get pre-approved and answer any questions you may have.
Get a VA Appraisal
Since the loan amount can’t exceed the VA’s estimate of the property, the home must be appraised by the Veterans Administration. Although anyone can request a VA appraisal (i.e., the lender, seller, or buyer), it normally comes in the form of an online request via The Appraisal System. While an appraisal may seem like an inspection, it’s important to not confuse the two. The VA appraisal may estimate the value of the property, but it’s not an inspection and doesn’t guarantee that the home is free from defects. All homebuyers, those using a VA home loan included, should carefully inspect the home and property themselves. To add an extra layer of protection, hire a reputable inspection firm to help.
Finalize the Loan
Now that you’ve learned how to apply for a VA home loan, and have done so successfully, it’s time to cross your t’s, dot your i’s, and take advantage of the many benefits of your VA loan. If the lender determines that you qualify based on credit history, income and debt, they’ll approve the loan. You (and your spouse, if applicable) will need to attend the loan closing and sign the note, mortgage, and any other relevant paperwork. During this time, the lender or closing attorney will review the loan terms and will be available to answer any questions. In order to be as prepared as possible for the closing, ask your lender for a copy of the terms beforehand. This way, you’ll have some time to look over the documents and write down any questions.
*100% financing up to county loan limits may be available for purchase loans or 1-unit cash-out refinances. Cash-out not available in Texas. Minimum FICO score requirements apply.
**Most VA loans will require a funding fee.