Lender Processes Application And Orders Va Appraisal
A signed purchase contract is the document youll need to finish your initial application. Once your lender has the contract, they will order the VA appraisal. Here again, not just any appraiser will do. Only a professional who is certified to perform appraisals to VA standards can evaluate the home being considered for VA financing. The VA appraiser will make sure the price youve agreed to pay for the home corresponds with the current value. Another very important part of the VA appraisal is to inspect the home to make sure it meets the VA minimum property requirements . However, the VA appraisal does not take the place of a home inspection, which focuses on code violations, defects and the condition of the property. While many borrowers have heard horror stories about the length of the VA appraisal process, the Department of Veterans Affairs gives the appraisers 10 days from order to completion barring extenuating circumstances. While youre waiting for appraisal documents, youll be busy submitting documents of your own to your VA-approved lender to show you have the ability to qualify for the loan. If the home passes appraisal for value and VA minimum property requirements, and its verified by the lender that you qualify for your loan, the underwriter will give his or her stamp of approval.
What Are The Basic Requirements For Va Loan Approval
- You must be an eligible veteran with available entitlement. You also need a valid Certificate of Eligibility.
- You must occupy the property as a primary residence within a reasonable period after the loan closes.
- You must be a satisfactory credit risk.
- Your income must be shown to be stable and sufficient to meet the mortgage payments and cover the cost of owning a home.
- The loan must be for an eligible purpose.
Selected Reserve Or National Guard:
|If you are not otherwise eligible and you have completed a total of six credible years* in the Selected Reserve or National Guard and one of the following:
*Individuals who completed less than six years may be eligible if discharged for a service-connected disability.
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Obtain A Certificate Of Eligibility
An experienced lender can help you obtain whats called a Certificate of Eligibility . The COE will prove that you meet initial eligibility standards for VA loan benefits. It will also let the lender know how much entitlement you can receive, which is the amount the Department of Veterans Affairs will guarantee on your VA loan. To get your COE, youll need to give your lender a bit of information about your military service. Usually, a COE can be acquired online instantly through a lenders portal or through the eBenefits portal on the va.gov website. Those servicemembers or surviving spouses whose COEs cannot be obtained online will have to get theirs by mail. A VA lender or the VA can help direct you to the right resource for your specific situation.
Q: How Do I Get A Certificate Of Eligibility
A: Complete a VA Form 26-1880, Request for a Certificate of Eligibility: You can apply for a Certificate of Eligibility by submitting a completed VA Form 26-1880, Request For A Certificate of Eligibility For Home Loan Benefits, to the Atlanta Eligibility Center, along with proof of military service. In some cases it may be possible for VA to establish eligibility without your proof of service. However, to avoid any possible delays, it’s best to provide such evidence.
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How Many Va Loans Can I Have
The VA home loan benefit for military service members is renewable. You can use it throughout your life as a perk of military service. But having more than one VA loan at a time stretches the entitlement and can limit its power. Depending on your areas conforming loan limits and the size of your existing loan, your second loan may require a down payment.
What Are Va Loan Eligibility Requirements
First of all, you need to make sure youre eligible for a VA loan. The government has service requirements for veterans or those on active duty, and also offers opportunities for certain military spouses to qualify for VA loans. You can get more information from the governments website, but the basic requirements include:
- Youre currently on active military duty, or youre a veteran who was honorably discharged and met the minimum service requirements.
- You served at least 90 consecutive active days during wartime or at least 181 consecutive days of active service during peacetime.
- Or, you served for more than six years in the National Guard or Selective Reserve.
If your spouse died in the line of duty, you may qualify for a VA loan.
In order to apply, you need to obtain a VA Certificate of Eligibility, or COE. Without this certificate, you wont be able to get your loan.
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Who Is Eligible For Va Loans
VA loans are designed for military personnel, veterans, and military families. The list of those who are eligible for this home-buying military benefit include:
- National Guard members
- Some surviving spouses
You must also have suitable credit, sufficient income, and a valid Certificate of Eligibility . And you must use the home for your own personal occupancy. Still unsure if youre eligible? Check the Department of Veterans Affairs website for a detailed list of eligibility requirements for military service members, veterans, and military spouses.
Can I Use My Va Home Loan To Buy Land
The Department of Veterans Affairs allows borrowers to use a VA home loan to buy land and construct a new home on a piece of property as an alternative to buying a pre-built home.
There are restrictions placed on the way the funds can be allocated. VA loans must be used for eligible purchases, which allows the Veteran to purchase or construct a residence, including a condominium or cooperative unit, to be owned and occupied by the veteran as a home.
The loans can include the land where the home will be situated and may also be guaranteed for the construction of a residence on land the borrower already owns. Its also possible to use the funds to refinance a purchase money mortgage or contract for the purchase of the land.
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The Ins And Outs Of Va Loans
The Department of Veterans Affairs mission is to serve service members. One way they do this is by offering home loans that consider the needs of military families.
What is a VA Home Loan?
A VA Home Loan may provide better financing terms for service members and their family. VA Home Loans are made through private lenders such as banks, loan associations, or even mortgage companies. If the loan is approved by the lender, the VA guarantees a portion of the loan, allowing the lender to give the service member a better rate.
VA Home Loans may be used to buy, build, repair, retain, or adapt a service members home.
What are the advantages of a VA Home Loan?
VA Home Loans differ case-to-case, but they have many advantages and benefits that non-military mortgages do not have.
No Down Payments:
Because of the guarantees a VA Home Loan provides, private lenders may not require a down payment.
Limited Closing Costs:
Some closing costs may be paid by the seller or lender.
Low Interest Rates:
VA Home Loans have some of the most competitive interest rates in the home loan market.
No Private Mortgage Insurance:
Veterans do not have to pay for private mortgage insurance.
One-time Funding Fee:
The VA Home Loan program charges a one-time funding fee. Certain veterans and service members are exempt from paying the funding fee. Members of the military community that are not exempt may pay this fee at closing or include it in their loan.
Minimum Property Requirements:
What If I Have Questions About The Loan Process
If you have any questions that your lender cant answer, you can call us at to talk to a VA home loan representative. Were here Monday through Friday, 8:00 a.m. to 6:00 p.m. ET.
You can also contact your regional loan center directly.
Learn how to get cash from your home equity to pay off debts, pay for school, or take care of other needs.
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How Does A Va Loan Work
The VA home loan is considered an unconventional loan. Theyre different than conventional loans because VA loans are specifically guaranteed by the government.
This just means the government agrees to repay a portion of the loan to the lender who gave you your VA loan if you dont make your mortgage payments and they have to repossess your house .
Since your lender takes on less risk compared to a conventional loan, VA mortgage loans are relatively easy to get.
Work With A Ramseytrusted Mortgage Specialist
To make the smartest decision when shopping for a mortgage, contact our friends at Churchill Mortgage. For decades, their home loan specialists have coached hundreds of thousands of people on how to get a mortgage that actually helps them pay off their homes faster.
About the author
Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.
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Documents You May Need To Provide During Va Loan Preapproval Include:
- A copy of your drivers license or other government identification
- A copy of your DD-214 or Reserve/Guard points statements
- A statement of service for active duty borrowers
- Recent pay stubs and W-2s for the last two years
- Recent bank statements
- Disability award letters
Talk with your loan officer if you have questions about documentation needs. The faster you get this paperwork back to the lender, the faster they can move to verify information and finalize your loan preapproval.
The loan officer will go over your paperwork, double check your income and other key details to verify your purchasing power and make a determination about whether youre ready to move forward.
The loan preapproval process builds toward an important final step generating a preapproval letter. If everything checks out, the lender will issue a preapproval letter. These arent a guarantee of financing, and they typically come with a host of conditions that need to be met.
But theyre powerful tools that give VA borrowers a clear sense of their purchasing power. They also show real estate agents and home sellers that youre a strong and serious buyer.
In fact, some listing agents and sellers only accept offers from preapproved buyers. That letter gives them confidence youll follow through on the offer and make it to closing day.
How Long Does It Take To Receive A Coe
If you apply online and your eligibility is easy to verify, getting your COE can be a relatively quick process: roughly 30 days. If you can, though, apply early, and leave six weeks for processing.
In rare cases, verifying service and eligibility can take time. For example, if your discharge was classified as less than honorable, you can go through the VAs Character of Discharge review process, which can take up to a full year.
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Does My Home Qualify For A Va Loan
Your VA appraiser will have final say in whether your home qualifies for a VA loan. To ensure the best chances for your property to be approved by the VAs Minimum Property Requirements , make sure your home covers the following:
- Mechanical systems are operating safely and are deemed to have reasonable future utility.
- Adequate heating supply that is in good working order.
- Roofing must be in good condition with no major leaks.
- Property must be free of any structural threats such as termites, rot, or fungus.
- Generally speaking, it is best to avoid homes listed as is as these homes tend to have one or more of the above listed issues.
Your property must be a conventional family home. VA appraisers tend to dislike unique properties due to the complications they can create when trying to find recent comparable homes. In addition, your lender may have additional restrictions to certain unique homes including but not limited to: ranches, converted churches, and homes with geodesic domes.
Undergo Va Appraisal And Underwriting
Underwriters from your lender assess your finances and make sure you qualify for a VA loan. The VA will also require an appraisal before they approve the loan. VA appraisals are stricter than conventional loans. During a VA appraisal, the appraiser will check that the home meets the VAs MPRs and is sanitary, structurally sound and move-in ready with minimal repairs.
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A Va Loan Is Assumable
Your VA loan can also be assumed by someone else. That means that another buyer could take over your existing mortgage , basically a transfer of loan terms from current owner to a new buyer. The only contingency is that the new buyer must also be VA loan eligible.If the new buyer doesnt have VA entitlement, your entitlement will remain attached to the loan even after assumption. However, this means that the current owner is basically putting their entitlement on the line, so beware and make sure your entitlement will be fully restored after assumption.Overall, a VA loan is an amazing option for service men and women to achieve homeownership. If youd like to know if youre eligible for this program, an Atlantic Bay Mortgage Group mortgage banker can help guide you through the process.
Im A Veteran Shopping For A Mortgage I Want To Use My Va Home Loan Benefit But Some Lenders Have Said They Dont Offer Va Loans Can They Do That
Yes, they can. Mortgage lenders can decide which loan programs to offer, and they dont have to offer VA loans.
While the VA encourages lenders to offer VA home loans to veterans, servicemembers and eligible surviving spouses, not all lenders participate in the VA home loan program. Veterans should shop around with different lenders for the best deal on any loan, including VA home loans. According to the VA, there are over 1500 lenders who closed at least one VA Home loan in 2015, so look around for options.
VA has eight Regional Loan Centers around the country that can help you navigate the process. You can visit www.benefits.va.gov/homeloans for more information.
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Va Loans Must Be Used For Your Primary Residence
Another thing you may want to know about a VA loan is that it can only be used for your primary residence, where you plan to spend the majority of your time. All that means is that you cant use your VA eligibility to buy a temporary residence, like a vacation home.With that said, you should also be aware of the following.
Find Your Level Of Entitlement
With a second loan, your remaining entitlement, combined with your local VA loan limit, could affect your price range as we described above. Its good to know right away what loan size you can get, especially if youre counting on making no down payment.
If you already have a VA loan that hasnt been paid off, youre using a portion of your entitlement, and your second home loan amount could be limited.
Details about your entitlement should be listed on your current Certificate of Eligibility. You can get your COE with help from a VA lender if necessary.
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Bottom Line: Is A Va Loan Right For You
A VA loan may be a good choice if you dont have perfect credit, or you want to buy a home without a down payment but dont want to pay mortgage insurance. Just be aware that you need proof of military service to be eligible and youll likely have to pay a funding fee that could add significant cost to your loan.
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Example Of When Youd Have More Than One Loan At A Time
Lets consider a hypothetical: Alex received PCS orders and now has to move herself and her family across the county.
She has a VA loan on her current home and plans to buy a second home using a VA loan as well. In the process of moving, Alex has a hard time selling her home. Or maybe she just doesnt want to sell her home and would prefer to hold onto it and rent it out.
In this situation, as long as her credit and finances qualify her for a loan, shed be able to get a VA loan for her new primary residence while retaining her current home. If shes earning rental income on that home, she may also be able to use that income to offset the cost of the mortgage for her current home when she applies for a new, second VA loan.
However, Alex might be limited in how much she can borrow without having to make a down payment on that second VA loan, depending on how much of her entitlement is left.
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