7 Steps to Navigating Your VA Loan Application

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ByChristopher Boston
Edited byRae Osborn
Contribution by1 expert
ByChristopher Boston
Edited byRae Osborn
Contribution by1 expert

Updated: October 29, 2023

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A VA home loan is a kind of mortgage offered to military service members, veterans and certain members of the National Guard and Reserves. Eligible borrowers can enjoy no down payment and no private mortgage insurance requirement, which can save money upfront and over time. As you venture into homeownership, knowing how to apply for a VA home loan is a solid stepping stone. Understanding the process gives you a roadmap covering everything from finding an appropriate lender to closing smoothly. You'll glean valuable insights that can make your VA home loan application journey easier.

How a VA Loan Works

A VA loan is a unique mortgage option supported by the U.S. Department of Veterans Affairs (VA), aiming to aid service members, veterans and eligible members of the National Guard and Reserves in buying a home. One of the benefits of a VA loan is the zero down payment requirement, which significantly lowers the upfront costs. These don't require private mortgage insurance (PMI) either, a typical requirement in conventional loans when the down payment is less than 20%. You're more likely to enjoy competitive interest rates, making your home loan more affordable over time.

It's crucial to understand what a VA loan is and the associated requirements to ensure a seamless application journey. Once you know you’re eligible, you’re all set to proceed to the first step in the application process — finding a VA-approved lender.

Find a VA-Approved Lender

Working with a VA-approved lender is a pivotal step in your journey toward owning a home through a VA loan. One not approved by the VA could derail your homeownership plans as they might not adhere to the VA's guidelines, potentially causing delays or denial of your loan. There's a variety of VA home loan lenders, each with different expertise and offerings. Here’s what to look at to help you select the best lender:

  • Interest Rates: Seek lenders offering competitive interest rates on VA loans. A lower rate can significantly reduce the total cost over the loan's life, making it more affordable. Compare rates from multiple VA home loan lenders to find the most favorable terms.

  • Fees: Understand the various fees associated with each lender, including loan origination fees, underwriting fees and other closing costs. A lender with lower fees can save you a considerable amount upfront, easing the initial financial burden of purchasing a home.

  • Customer Reviews: Dive into customer reviews to gauge the lender’s reputation and quality of service. Positive reviews, especially from other VA loan borrowers, can provide insight into a lender's expertise and customer service. A lender with high ratings and good reviews will likely give a better overall loan experience.

  • Response Time: Assess how quickly lenders respond to your inquiries and provide needed information. A responsive lender can help expedite your loan process, addressing any concerns promptly and keeping your application on track. Timely communication is crucial for navigating the VA loan process smoothly.

  • Knowledgeable Staff: Ensure the lender has a team well-versed in VA loans and their unique requirements. Their expertise can be invaluable in guiding you through the process, clarifying doubts and ensuring you complete all the necessary steps.

Taking time to research and compare VA home loan lenders might feel like a long detour, but it could save you time and money. Once you have a shortlist, contact these lenders and ask questions regarding their loan terms, fees and the application process to gather all the necessary information for a well-informed decision.

Now that you know how to pick the right lender, the next step is to secure a Certificate of Eligibility, which validates your entitlement for a VA loan.

Secure a Certificate of Eligibility

The VA Loan Certificate of Eligibility, often abbreviated as COE, verifies to lenders that you are eligible for a VA loan. It's a crucial step in securing your VA loan as it provides the evidence lenders need regarding your service-related eligibility.

Getting one is straightforward — just two steps. But it’s best to know your options:

Gather Your Information

You'll need to provide proof of your military service. This could be a DD Form 214, showing your dates of service and discharge status.

Choose How You’d Like to Request Your Certificate

Online Application

  • Visit the eBenefits portal on the VA website.
  • Create an account if you don’t have one, or log in if you do.
  • Follow the prompts to request your COE.

Through a Lender

  • Many lenders have access to an online system where they can obtain your COE within minutes.
  • Provide your lender with the necessary proof of service, and they can assist you in getting your COE.

Mail Application

  • If online methods aren’t suitable, you can apply by mail.
  • Fill out VA Form 26-1880 and mail it to the VA along with your proof of service.

If you apply online, you might get your COE in minutes, especially if you go through a lender. However, mail applications can take a few weeks. To expedite the process, ensure all the information and documentation are accurate and complete to avoid any back-and-forth. With your VA loan certificate of eligibility, you’re ready to move on to the next step — getting pre-approved for a VA loan.

Get Pre-Approved

Pre-approval for a VA home loan is not mandatory, but it's recommended. It gives you a clear understanding of your budget and shows sellers that you are a serious, qualified buyer. That can give you an edge in competitive markets. To get pre-approval, ensure you have the following documents:

Proof of income (recent pay stubs, tax returns) Employment verification Credit report Personal identification (driver’s license or passport) Other financial information (such as other loans or obligations)

Considering how a pre-approval can help your mortgage journey, apply some of these strategies to make a positive outcome more likely:

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    Check Your Credit Score

    Obtain a free credit report from one of the major credit bureaus or through a free credit score service. If you find any errors, dispute them with the credit bureau to have them corrected.

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    Reduce Debt

    Evaluate your current debts, including credit cards, loans and other financial obligations. Prioritize paying down high-interest debt and reducing your overall debt-to-income ratio. Lowering your debt not only improves your financial health but also makes you more attractive to lenders.

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    Avoid New Debt

    Refrain from opening new credit accounts or making significant purchases on credit before and during the pre-approval process. New debt can lower your credit score and change your debt-to-income ratio, potentially affecting your pre-approval status.

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    Save Money

    Accumulate savings to showcase financial stability to lenders. Having extra savings can also help cover any unforeseen costs during the home-buying process.

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    Be Honest

    When providing financial information to your lender, ensure accuracy and completeness. Being transparent and honest helps build trust with your lender and can expedite the pre-approval process.

Once you secure a pre-approval for a VA home loan, note that it typically remains valid for 60 to 90 days. If it expires before you find a home, you can always renew it by providing updated financial information to your lender. With pre-approval, you're in a solid position to go house hunting and sign a purchase agreement, which formalizes your intent to buy.

Go House Hunting and Sign a Purchase Agreement

Finding a home that aligns with your needs and budget is a critical step when making a wise investment. It’s where you'll create memories, so ensuring it fits your lifestyle and financial capacity is crucial. Now, let’s explore some tips to help you find that perfect home:

Create a Wish List

Identify what features are essential in your home, like the number of bedrooms, proximity to work or a spacious backyard. Knowing what you want helps narrow down your options.

Set a Budget

Determine what you can afford. Stick to homes within your budget to avoid financial strain in the future.

Consider VA Property Requirements

The VA has specific property requirements to ensure the home is safe, sound and sanitary. Ensure the homes you are considering meet these standards to avoid problems later in the loan process.

Research Neighborhoods

Explore different areas to find a neighborhood that meets your needs, whether you value school districts, safety or local amenities.

Attend Open Houses

Visit multiple homes to get a feel for what’s available within your budget and preferred neighborhoods.

Work With a Real Estate Agent

Consider working with an agent experienced in VA loans, who can guide you through the home-buying process. In your offer, you should include contingencies for protection, like a home inspection contingency to ensure the house doesn't have hidden issues or a financing contingency to protect you if you can't secure the loan.

Once you find a home, it's time to make an offer and sign a purchase agreement. In your offer, you might want to include contingencies for protection, like a home inspection contingency to ensure the house doesn't have hidden issues, or a financing contingency to protect you if you can't secure the loan.

Complete Your VA Home Loan Application

Completing your VA home loan application begins with diligently filling out the form your lender provided. You’ll have to detail your financial situation and the home you aim to purchase. Having the purchase agreement and essential financial documents ready is crucial.

Upon submission, your application enters the review phase, where your lender meticulously examines it. Maintain an open line of communication with your lender during this time. That ensures you can swiftly address further inquiries, such as requests for additional documentation. A quick response shows your earnestness and can expedite the process.

Complete the VA Home Appraisal and Inspection

A VA home loan inspection delves into the home's condition, checking for safety issues and necessary repairs, while an appraisal determines the home's market value. The VA requires an appraisal but not an inspection. However, it's wise to have both. To schedule these, contact licensed professionals, ensuring they're available before your purchase agreement's deadlines.

The home inspection helps you avoid unforeseen repair costs. If it reveals issues, you can negotiate repairs with the seller before proceeding. The appraisal ensures you don't overpay for your home. It also affects your loan amount. For instance, if a home is appraised at $200,000, but the selling price is $250,000, the VA will only guarantee a loan up to the appraised value.

Close on Your Loan

The closing process is the final step, where you'll review and finalize the loan terms and fees. It's where all the paperwork you've been working on gets officially signed, making you a homeowner. You’ll also encounter closing costs, which are the fees required to finalize your loan and transfer the property's ownership.

Here are some costs that you might encounter before you finish the VA loan application process:

  • VA Funding Fee: A mandatory fee on VA loans, the VA Funding Fee goes directly to the VA to ensure the program continues for future veterans. The amount varies based on loan amount, service type and whether it's your first VA loan.

  • Loan Origination Fee: VA lenders can charge up to 1% of the loan amount to cover the cost of processing the loan. It’s negotiable and varies from lender to lender.

  • Title Insurance: It protects you and the lender from future claims against the home's ownership. VA loans also require a title examination and title insurance to protect against claims for past occurrences.

  • Appraisal Fee: The VA requires an appraisal to determine the home’s market value and ensure it meets VA property requirements. This fee is typically between $300 to $500.

  • Home Inspection Fee: Although not required by the VA, a home inspection is advisable to uncover potential issues with the home. The cost varies based on the home's size and location.

  • Recording Fee: Charged by a local recording office, this fee is for documenting the sale and is a standardized part of the closing process.

When reviewing closing documents, ensure the loan terms match your agreement. If there are errors or unclear terms, ask for clarification before signing. This step is crucial as it's your last chance to correct any issues. Once you sign and file your certificate, your loan is finalized. Be sure to keep a copy for your records.

Frequently Asked Questions About Applying for a VA Home Loan

Diving into the process of applying for a VA loan can bring up a lot of questions; our FAQ section can help clear things up. You'll find answers to some common queries about VA loans, whether it’s about eligibility, the steps involved or what to expect during the loan application process.

What is a VA loan, and who is eligible?
What is a certificate of eligibility (COE), and how do I obtain it?
Why is pre-approval important in the VA loan process?
Does a VA loan require a down payment?
Does a VA loan require a home inspection?
Can a non-US citizen get a VA loan?
Are there any upfront fees associated with a VA loan?
Can I refinance a VA loan, and what does that process look like?
How long does the VA loan application process typically take?

VA Loan Application Questions and Answers

  1. What if the house I want to buy fails the VA appraisal?
  2. What if the VA appraisal is lower than the asking price?
  3. Who orders the VA appraisal?
  4. Do I need a lawyer to complete a VA loan?
  5. Do I need a real estate agent for a VA loan?
  6. Do I have to live in the property I buy with a VA home loan?
Richard Bettencourt
Richard BettencourtCertified Military Housing Specialist

About Christopher Boston

Christopher Boston headshot

Christopher (Croix) Boston was the Head of Loans content at MoneyGeek, with over five years of experience researching higher education, mortgage and personal loans.

Boston has a bachelor's degree from the Seattle Pacific University. They pride themselves in using their skills and experience to create quality content that helps people save and spend efficiently.