A beautiful American dream is to buy a nice house and move with the whole family there. In order to make it real, that means to acquire a dwelling, you need to work long and hard. But sometimes, a wish of the new home can be almost inaccessible. People like veterans or military personnel sometimes cannot afford new apartments. Therefore, for such cases, there is a special VA loan processing that will help alleviate the situation or make your fantasy comes true.
How Does a VA Loan Work
VA loan process is an opportunity to get a loan to people with disabilities, war veterans, military personnel, or their widows. This is a loan issued by private lenders with the support of the US Department of Veterans Support.
The Law on VA credit has existed since 1944 when it was adopted in the legislative system. Over the past two years, the popularity of the VA loans process has doubled. Thus, for example, in 2018, 8% of all purchases was carried out thanks to this law.
How do VA loans work? This is a prototype of a mortgage loan, but the state gives guarantees. The state itself takes on a small risk of payment.
If a citizen fails to repay the loan or loses his home through a buyout, then the state will pay for it. Thanks to such a system, obtaining such a loan is easier than any other home loan.
VA Home Loan Process
In order to get a VA loan, you need to contact a private company of lenders. As a rule, a BA loan is issued without an initial payment, due to which it is easy and quick to get a loan on favorable terms for the buyer.
The process of obtaining a loan to buying a home consists of five relatively simple steps.
- The first and most important step is to apply for a VA loan in Certificate of Eligibility (COE). The application process consists of collecting the necessary package of documents that proves your inability to work or the right to benefits. After submitting the application and its approval, you should receive permission to get this loan. Permission is needed in order to present it to your lender on the basis of evidence that you have the right to receive this type of loan.
- The second equally important step is to count your finances. It will be necessary to carefully calculate all your income, expenses, payments, in order to know how much money you can allocate to pay the mortgage. A special mortgage calculator CFPB can help in calculating mortgage loan processing steps. In the same place, in the Bureau of financial protection, you can get acquainted with the rights of consumers if you have questions. Also, do not forget that in order to get a VA loan you will need to pay for financing a loan, and also allocate money in advance to close it. Each year, the mortgage limits of a VA loan change, so you should always calculate in advance the current limits of a mortgage loan. Mortgage limits, in turn, can be of two types, basic and bonus. The basic ones imply 25% of your loan amount, and the bonus one will add even more loan money to these percentages.
- After you calculate all your expenses, collect the necessary information about finances, statements, and checks, you can go to all creditors with all these documents. A mortgage company, a private bank, or a credit union can give you a VA loan. In any case, you need to choose lenders in accordance with their conditions. Basically, all lenders charge 1% of the commission for a VA loan. Additional money may also be charged for services or advice.
- Choosing a real estate agency. Having received a loan and money for a new house, we advise you to choose a good realtor who can find a nice house, without removing a high commission for it.
- And finally, the most pleasant step is the choice of the house itself. Always rely on your finances choosing a property, as different houses require different taxes.
How to Apply For a VA Loan
In order to obtain the right for crediting, you must necessarily apply for a Certificate of eligibility for participation (COE). This is the one and only way how to get a VA home loan.
Depending on what social status a person occupies, it will be necessary to collect a package of documents and draw up a questionnaire. Confirmation from COE is necessary in order to prove your lender the right to a VA loan.
First of all, the war veterans or military personnel can get a VA loan. Also, people who have not rightfully lost their jobs can get a loan too. Even if you do not enter one of the previous categories, you can still get a loan if:
- You have limited options;
- Disability that is related to the service;
- Medical conditions (health problems);
- Dishonest dismissal;
- Former soldier;
- Member of organizations such as the health service, ocean research services, the military academy cadet and the air force;
- Former sailor;
- Widow of a dead or missing soldier.
There are also ways if you were fired for work for disrespectful reasons or the personal interests of your superiors. In this case, you can apply for changes in working status.
It is also worth considering that if you received a VA loan earlier, then you can use it a second time. This is possible only in a few cases, such as the full repayment of a previous loan and the resale of the purchased house.
How Long Does It Take to Get a VA Loan
On average, the VA appraisal timeline takes from 40 to 50 days. That is, one and a half to two months. During this period will be completed all five of the basic steps for obtaining a VA loan that was previously described.
However, it may take longer to complete and sign all the documentation. It may depend on factors such as:
- How fast will the confirmation of the statement come.
- Is it necessary to make any repairs there.
- How to find a suitable home in a short term.
These and other factors can affect the time of obtaining and closing a loan. In any case, it can take no more than two months.
How to Find a Suitable Home in a Short Term
After receiving a Certificate of eligibility, which gives you the opportunity of obtaining and using a VA loan, there are several steps that you must follow before you enter a new house.
In fact, the most frequent use of a VA loan is to buy and later resell the house at a higher price. But before buying a house, you need to go through a series of procedures.
Having found a real estate agent, you will need to draw up a contract with him. At the same time, it is worth considering such points as the termination of the contract, if for example, the house does not pass the inspection.
The contract should indicate that the house is bought with a VA loan and that the realtor will withdraw the commission under this loan condition.
The second equally important step will be to inspect the property that you are going to buy. To do this, you can be provided with a VA-approved appraiser who can adequately assess whether your home is worth the money.
In addition, the buyer may request to review the house and set a new price, ask the seller to lower the price, or simply pay the difference between the estimated and selling price.
Check all documents again. When buying a home, a real estate company will provide you with a huge amount of documentation that needs to be signed. Therefore, we strongly recommend that you devote time to each paper to double-check the information. The procedure for closing a loan and signing documentation is given 3 days.
Closing a loan, you can move to your new home with a pure soul.
VA Loan Requirement For Buyers
Before buying a home, real estate must be reviewed by a special appraiser who will give you an estimate of the cost.
Please note that the valuation of real estate on a standard loan and the valuation of real estate purchased with a VA are different.
Double-review all the necessary documents and take with all seriousness and care to the choice of the house itself.
Documents Needed for a VA Loan
Depending on the benefits for which you get a VA loan, the list of documents that are needed to obtain approval will also depend.
After the candidate fills out the standard application form for obtaining the right to a VA loan, in addition to this, he will need to provide several documents confirming his belonging to a certain group of beneficiaries.
- Veteran – a copy of the dismissal or a document from the department in which the person served. Just keep on veterans administration home loan guidelines;
- Military – statements from the duty station, signed by the commander;
- Member of the National Guard – if you are still a current or former member, then you need a copy of the dismissal document;
- The widow of a veteran or a soldier who has died will need to provide documents on the veteran’s discharge, copies of the marriage license, death certificate, and benefits documents if any.
All these documents must go without fail along with a passport and ID number.
Where to Apply for a VA Loan
In order to get a Certificate of Eligibility, you can apply to the following points:
- The easiest way is to contact a private lending center that will do all the work for you and provide you with a CEO.
- Fill out the form VA 26-1880 and mail it to the regional credit center.
- Send an application online through eBenefits.va.gov