First-Time Homebuyer

How to Get Pre-Approved for a VA Home Loan

So you're ready to buy a house, you've done your research and you think you're ready to take the plunge. But there's one more step you need to take before you can start shopping for your dream home: getting pre-approved for a loan. 

If you’re a veteran or active-duty service member, you may be eligible for a VA home loan. VA home loans are backed by the U.S. Department of Veterans Affairs and offer several benefits, including no down payment, no private mortgage insurance, and more flexible credit requirements.

If you’re interested in applying for a VA home loan, the first step is to get pre-approved by a lender. In this post, we’ll walk you through the process of getting preapproved for a VA home loan so that you can confidently move forward with your home-buying journey.

7 Steps to Pre-Approval and Securing a VA Home Loan

Pre-approval is different from pre-qualification, which simply means that you've provided some financial information to a lender who then gives you an estimate of how much you could potentially borrow. Pre-approval, on the other hand, means the lender has checked your credit score, employment history, and financial information and has determined that you're eligible for a loan up to a certain amount. In other words, pre-approval gives you a firm commitment from the lender that they're willing to give you a loan.

Here’s a step-by-step guide on how to get pre-approved for a VA home loan so you can make your dream of homeownership a reality.

Step 1: Check Your Credit 

One of the first things you need to do when getting ready to apply for a VA home loan is to check your credit. Your credit score is one of the most important factors that lenders will consider when determining whether or not to approve your loan application and determining your interest rate, so it's important to make sure that it's as high as possible before you apply. One thing to note is that, with Military Home Spot Lending, VA loans typically don’t require a certain credit score in order to qualify, however the higher your credit score, the better your chances of approval are and the better your interest rate will be.

You can get free copies of your credit report from all three major credit bureaus—Experian, TransUnion, and Equifax—and once per year at Review your credit report carefully and dispute any errors that you find. If there are any negative items on your report, try to get them removed before applying for your loan.

Generally speaking, the higher your credit score, the better interest rate you’ll be offered on a loan. If you find that your credit score isn’t as high as you’d like it to be, don’t worry—there are plenty of things you can do to improve it. For example, you can make sure that all of your bills are paid on time, keep your credit card balances low, and avoid opening too many new lines of credit at once.

Step 2: Know How Much House You Can Afford

Once you know your credit score and have reviewed your credit report, it’s time to start thinking about how much house you can afford. Begin by evaluating your monthly income and expenses to get an idea of how much wiggle room you have in your budget for a mortgage payment. Generally speaking, your monthly mortgage payment should not exceed 35% of your gross monthly income (your income before taxes are withheld).

Step 3: Get Your Documents in Order

The next step in getting pre-approved for a VA home loan is to gather all of the necessary documentation. Most lenders will require things like tax returns, pay stubs, bank statements, and investment account statements. If you're self-employed or have any unusual income sources, be prepared to provide additional documentation so that the lender can properly evaluate your application.

You’ll need to provide this documentation to your lender so that they can get a clear picture of your financial situation and determine whether or not you qualify for a VA home loan. If you’re not sure what kind of documentation you need to provide, don’t hesitate to ask your lender–Military HomeSpot Lending is always happy to help.

Step 4: Find a Lender Who Specializes in VA Loans

Not all lenders offer VA loans, so it’s important to find one that does before moving forward with the pre-approval process. It’s vital to make sure the lender you choose is experienced in handling VA home loans.

A good place to start your search is with banks or credit unions that have experience working with members of the military. You can ask friends or family members for recommendations or search for lenders online who specialize in VA loans. You can also check out the Department of Veterans Affairs website for a list of approved lenders. Once you’ve found a few potential lenders, take the time to compare their rates and fees so that you can get the best deal possible.

Step 5: Get Pre-Qualified

The next step is to get pre-qualified by each of the lenders on your list. This will give you an idea of how much each lender is willing to lend you based on factors like your income and debts. Getting prequalified is generally a fairly quick process that can be done online or over the phone. Most lenders will just need to verify some basic information about you before giving you a pre-qualification letter that includes an estimate of the loan amount for which you qualify.

Step 6: Get Pre-Approved

Once you have chosen a lender, it’s time to get pre-approved for a VA home loan. This is where things start getting serious. 

The process of getting pre-approved involves submitting documentation so the lender can verify your financial information and confirm that you meet all the necessary criteria for a VA loan. Once everything has been verified and approved, the lender will provide you with a pre-approval letter that specifies the maximum loan amount for which you qualify. This is what real estate agents and sellers will want to see when considering any offers from buyers who are financing their purchase with a VA loan.

Step 7: Receive Your Preapproval Letter

The next step is arguably one of the most fun ones. This is when you receive your preapproval letter! Once your lender has cross referenced your income, credit, assets, and other financial information against their product mix and determined a good fit, then you will received your preapproval letter. This letter is your lender’s good faith to you that, barring any changes in the verified information and a home that meets the product guidelines, that you should be green lit to go make an offer on a home.

Boost Your Pre-Approval Odds for a VA Loan

Gaining pre-approval is an essential step in the home buying process because it gives you an idea of how much money you can qualify for, as well as what type of interest rate and monthly payments you can expect. It also lets sellers know that you are serious about purchasing their property and makes them more likely to accept your offer. Here are some quick tips for increasing your chances of getting pre-approved for a VA home loan: 

Get Your Credit in Order 

A high credit score will help you get approved quickly while a low credit score may delay the process or even disqualify you entirely. Make sure that all your debt payments are up to date, as lenders will be checking your credit report closely. If there are any errors on your report, make sure they are corrected before applying.  

Save Enough Money 

Lenders want proof that you have sufficient funds available to make any possible down payments and cover closing costs. Although down payments aren’t required on VA loans, it is important to account for closing costs, which typically range from 2%-5% of the purchase price.  

Find an Experienced Loan Officer

Working with an experienced loan officer is one of the best ways to ensure that your application goes smoothly and that nothing falls through the cracks. They should be able to guide you through the entire process from start to finish and explain any unfamiliar terminology along the way. 

How to Get Pre-approved for a VA Home Loan

Getting preapproved for a VA home loan is an important first step in buying a home—but it's just the first. Following these simple steps will help put you on the path towards getting pre-approved for a VA home loan—and one step closer to owning your dream home. 

Just remember to take things slow and steady, there’s no rush when it comes to such an important decision as buying a home. And if at any point during the process you have questions or need assistance, don’t hesitate to reach out to us here at Military HomeSpot Lending—we would be more than happy to help guide you through every step of obtaining your VA home loan.

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