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Seven Steps to Getting a VA Home Loan

Veterans Affairs (VA) mortgage loans have increased exponentially in recent years due to the downturn in the U.S. economy. This economic slump has resulted in banks tightening lending standards for conventional loans. The increase in VA loans is largely due to the fact that they are easier to qualify for than conventional mortgages and are one of the few mortgage options available for qualified borrowers who do not have a down payment.

VA loans often offer lower interest rates than other type of loans and are available for the “full reasonable value” of a given property. Consequently, a down payment is not required as with other government programs such as FHA, which requires a 3.5 % minimum down payment. slick cash loan

So what is a VA loan? VA loans are home mortgages guaranteed by the U.S. Department of Veterans Affairs however they are not a direct lender. The loan is made through a private lender (of your choice) and is guaranteed by the VA as long as guidelines are met. What are the guidelines and who actually qualifies for a VA loan? To follow are the seven basic steps you will need to take to successfully obtain a VA home mortgage loan.

Step One: Determining Eligibility

Most members of the military – veterans, reservists, and members of the National Guard are eligible to apply for a VA loan. The spouses of military who died in active duty or as a result of service-connected disability may also apply. Active duty members qualify after about six months of service.

Reservists and National Guard members must wait six years to apply unless they are called to active duty, where they gain eligibility after 181 days of service. However, during war periods members are generally eligible after 90 days of service. In consideration of your status of service, loan applications can differ. Your VA regional office personnel can assist you with any additional eligibility questions.

After pre-determining your eligibility, the first step for potential borrowers is to obtain a Certificate of Eligibility (26-1880) before applying for a loan. At this juncture, you will need to select an accredited VA loan specialist who will assist you in moving forward in the loan process which includes accessing and submitting this eligibility form online.

Step Two: The Pre-Approval Process

Before embarking on step two of the VA loan process, it is crucial that you have pulled your credit report in advance with all three credit reporting agencies to see where you stand with your FICO credit score. You should thoroughly examine the report for any errors and/or identity theft, taking care of any such issues beforehand. Although Veteran’s Affairs does not require a minimum score for a VA loan, most lenders have internal requirements, asking for a credit score of 620 or higher.

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