The VA Loan Process
The VA loan is not a typical housing loan. The U.S. Department of Veterans Affairs guarantees this type of loan. If you qualify, numerous benefits could help you and your family.
If you are an active-duty service member, veteran, reserve member and a surviving spouse of a service member you are potentially eligible for a VA loan. The Department of Veterans Affairs doesn’t act as the lender on a VA loan. Instead, this department guarantees participating private lenders that the VA will accept liability for VA loans if you default. This security provides additional benefits to those who qualify.
Additional benefits include:
- No private mortgage insurance requirement
- No down payment requirement
- No prepayment penalty
- Closing costs are limited
There are also additional reasons for why you should consider a VA loan. The VA doesn’t have a limit on how much you can borrow to finance a house. The possibility of not having to pay a down payment is also very beneficial for some families because of their financial situation. Also, a VA loan is considered an assumable mortgage. An assumable mortgage means that another eligible buyer can take over the loan if the mortgage lender approves. This is useful in situations where military families may have to move within a tighter timeframe.
The process of obtaining a VA loan may take longer, but it is relatively straightforward. First, it is essential to obtain a Certificate of Eligibility (COE). The COE is obtained through an application process after establishing your eligibility for the VA loan. The application process can be completed through the eBenefits website, through the lender, or even by mail. Obtaining the COE is necessary to truly secure a VA loan. While this doesn’t have to be done first, taking time to fill out the appropriate materials will help to expedite the process. However, your lender can help you, but it can take up to 4-6 weeks to receive your COE.
Choosing a lender is the next step in the process. It’s essential to find the right lender to guide you through obtaining your VA loan. Also, hiring a realtor who is experienced in working with VA loans will help. When you are looking for lenders, make sure to ask if they supply VA loans, and also if they have previous experience securing VA loans. This will help make the loan process as easy as possible.
Once you find a lender that has the proper experience, you can work on getting pre-approved. This approval process allows the lender to see the size of the mortgage that may be available and also one that is affordable for you.
Lastly, signing a purchase agreement once you have found your house and if your loan has been approved, you will be guided through the closing process. Having someone who can assist you in conducting the closing process will help facilitate the time and date of the official transfer of the home.