How to get preapproved for a VA home loan? VA loan is a financing process that is covered by the Department of Veterans Affairs. It is designed to back on-duty service members, veterans, and qualifying souses of the members to buy or build property for themselves.
A VA loan does not require any down payment or minimum credit score. Also, there is no maximum limit on how much you can get compared to your income. Overall, the whole procedure is not hard. You need to be eligible to apply for the loan. So, let’s dive into, how to get preapproved for a VA home loan?
Who are eligible to get a preapproved VA home loan?
A person has to have served a minimum of 90 consecutive days during wartime.
Also, a person who has severed a minimum of 181 days during peacetime.
A person who has served a minimum of six years as a National Guard or in the Reserves.
A person who is the spouse of a member who has passed away on duty or the death has been caused by any service-associated disability.
Why do you need to get the VA loan preapproved?
If you are planning on spending the to be acquired money on buying or building a home, getting it preapproved would help you assess the budget. Also, you will be able to look for properties that are suitable. Through, a preapproved home loan, your sellers would understand how serious you are about the whole deal. Also, that their property is going to be sold to the right hands.
Now, there is a fairly easy yet set process to follow before your VA home loan gets preapproved.
The process to get the VA loan preapproved
Also, you should remember to submit the preapproval letter in the offers you find interest in. It will let the sellers know that you are financially eligible to buy their property and increase their confidence in the deal.
Gathering financial documents
Before applying for the loan you must pile up some financial documents as they can be handy. The documents include your income papers, debt information, and monthly expenditure. Gathering the most recent pay remnants, tax returns, any previous or current loans, credit cards, and huge investments also is recommended as the lender organization can wish to verify them after you apply.
Choosing the VA mortgage lender
Your second step would be selecting a VA loan lender. How to do it? You must know that only approved mortgage companies can lend VA loans. While browsing through various companies remember to go with one that is highly experienced and that specializes in VA loans. By choosing such a lender company you will opt for a smooth and efficient loan process.
Apply for preapproval
After completing the first two steps, you need to fill in the preapproval form. Some companies call it “prequalification”. Whatever it is, you will need to enter the necessary details. It may include your income, credits, debts, and other financial data. The same information of your spouse will also be needed if the person is applying for the loan alongside you. The lender companies do this to assess your financial capabilities and any possible risks as the borrowers.
Get the COE
You need to get the Certificate of Eligibility from the Department of Veterans Affairs. You will need to show it before your VA loan gets approved. There are two ways to get the COE. You can yourself do it by logging into the e-Benefits portal and apply for your COE, or the lending company can request it on your behalf. Good mortgage lending companies usually do this to let their clients be hassle-free.
Get in touch with a VA loan officer
Speaking to a VA loan officer should be your next step. It is necessary for the time when you probe into your finances and the aim to buy a property further. The loan officer can follow up on the application form you have submitted for the preapproval and wish to know more details about your financial circumstances.
Receive the VA loan preapproval letter
Once your application is has been reviewed by the lender and is signed off by the VA loan officer, you are clear to get the preapproval letter. The final letter will indicate that you have been approved to get your loan. It will also show the estimated value for the VA loan you are qualified to borrow. Now, you can freely search for the kind of houses or lands you want based on the loan amount. Also, you should remember to submit the preapproval letter in the offers you find interest in. It will let the sellers know that you are financially eligible to buy their property and increase their confidence in the deal.
Q1: How long does it take to get the VA home loan preapproved?
The time span is different for every loan application. But it does not take much longer to get it approved than it takes to get an FHA loan or other conventional loan approved. If your documents are in order and clear to get the loan, they can even get preapproved within 48 hours.
Q2. For how long will the letter work?
It depends on the lending company you are getting the loan from. However, usually, the preapproval letter is good to go for 90 to 120 days.
Q3. Can a VA home loan application get denied?
In case your income level is too low, the VA loan preapproval application can get denied by the lending company. Also, there are other reasons that can affect your VA loan process. 01. Errors in the preapproval application 02. Change in employment 03. Variation in credits 04. Delay in submitting financial documents All you can do is ask the company for clarification. They will let you know the actual reasons and if it is because of your financial situation.
Documents needed to be provided during a VA home loan preapproval:
What kind of properties can you buy with your VA home loan?
Newly built house
Existing single-family property
Readymade customized house
Multi-unit houses (such as a duplex home)
A land plots
Refinance a standing loan
The acceptable ratio of getting a VA home loan preapproved is 41%. So, if you are eligible to get the loan preapproved, no one can stop you from getting it. Talking to the lenders and VA loan officers would also help you understand detailed factors about the whole process. We suggest you go for it if you are confident in your financial credibility.