The VA home loan is like any other loan program with regard to the basic process, although there are a few differences when compared to an FHA or conventional mortgage. There is some terminology you may not yet be aware of, and you’ll soon get your fair share of loan disclosures and documentation requests, but knowing in advance how to obtain a VA loan will help make the procedure rather pain-free.
Contact a VA Approved Lender
Your first step is to contact a loan officer at a VA approved lender. It’s important that you work with a lender that is truly VA approved. Some mortgage companies will take a VA loan application then forward the application to a VA approved lender. There are a few “quirks” in the VA lending process that, unless the loan officer is experienced with VA home loans, it’s possible the application could stall, or worse, be declined needlessly.
When speaking with a loan officer, your conversation will center on what you’d like to buy, where you’d like to live, your job, and so forth. At the end of the initial conversation you’ll receive a prequalification amount, the approximate loan amount for which you qualify. Your next step is to complete a VA loan application.
VA Loan Application Process
The VA loan application is much like any other mortgage application. Most VA loan applications are completed online, although you may still fax an application or meet with your loan officer face-to-face to complete the form. Once the application is submitted, you will receive a documentation checklist, which itemizes what you need to supply the VA lender. Your VA lender will also order your Certificate of Eligibility, which will show the amount of entitlement you have available. If you’ve never used your VA entitlement, it will be $36,000 where the VA will guarantee a loan up to four times that amount, or $144,000. For loan amounts above that mark, the VA will guarantee a loan up to $417,000, or higher in certain “high cost” areas.
To complete the VA loan process, you will be asked to provide your most recent paycheck stubs that cover at least 30 days, your two most recent federal income tax returns, your W2 forms, and copies of your recent bank statements. Once those items are submitted, the VA lender will electronically upload your application to receive an automated approval, which will issue your approved loan amount along with a final request for additional documentation if needed. If you don’t yet have your preapproval letter, you will receive one at this stage.
If you’ve yet to find a property, now it’s time to go shopping. Working with your real estate agent, once you find your new home, you will present your preapproval letter along with your offer. Once accepted, the ball really begins to roll. The VA lender orders the appraisal from the VA, and contacts the settlement agent and other third parties to arrange for a closing date.