The VA Home Loan Process: A Step-by-Step Guide
So, you’re interested in a VA home loan? You’re not alone – each year, hundreds of thousands of veterans, active duty military members, and reservists utilize this incredible benefit. But the process of securing a VA loan can be confusing and complicated for first-time borrowers.
Purchasing a home is a huge accomplishment. If you are a veteran or active servicemember, you may be wondering how to go about securing a VA home loan. This guide will walk you through the process step-by-step so that you can confidently move forward with your home purchase.
7 Steps to Securing a VA Home Loan
The Department of Veterans Affairs provides a home loan guarantee benefit and other housing-related programs to help veterans buy, build, repair, retain, or adapt a home for their own personal occupancy. VA Home Loans are provided by private lenders, such as banks and mortgage companies. The VA guarantees a portion of the loan against loss, enabling the lender to provide you with more favorable terms.
Step 1 - Obtain Your Certificate of Eligibility (COE)
The first step in the VA home loan process is obtaining your Certificate of Eligibility (COE). Your COE is proof that you meet the basic service requirements for a VA loan, and it’s required in order to move forward with a loan application. You can obtain your COE in one of three ways:
- Through your lender
- Through a VA Regional Loan Center
- Online through the Veterans Administration eBenefits portal
If you have any questions about obtaining your COE, your lender will be happy to assist you.
Step 2 - Shop for a VA Specializing Lender
Once you have your COE in hand, it’s time to begin shopping for a VA specializing lender. The next step in securing a VA home loan is to get in touch with a lender who specializes in these types of loans.
Lenders will pull your credit report and let you know what amount you may qualify for. Be sure to ask about interest rates and any fees associated with the loan. Once you have found a lender that you are comfortable with, it’s time to move on to the next step.
You’re not required to use the lender who provides your COE, so take your time and find the right fit for you. It’s important to shop around and compare rates, fees, and terms from multiple lenders before making a decision.
Step 3 - Get Pre-Approved
From your selection of VA specializing lenders, you can now begin the pre-qualification and pre-approval processes of securing a loan.
To get prequalified, you'll need to provide the lender with some financial information, including your income, assets, debts, and credit score. Once you've submitted this information, the lender will review your finances. Afterwards they will provide you with a pre-qualification letter that includes an estimate of how much money you can borrow.
Getting pre-qualified is important because it will give you an idea of how much house you can afford. Once you have been pre-qualified, you can then begin the pre-approval process of submitting income, asset, and other pertinent documents needed by your lender to verify your prequalification number. Once that is completed and you are preapproved, then you can start to shop for homes in your price range.
Step 4 - Resubmit Documents and Submit Purchase Contract
After finding a home that you're interested in purchasing, your real estate agent will help you submit an offer to the seller. If the seller accepts your offer, the next step is to offically apply for a VA loan through a participating lender.
The lender will likely require updated documentation from you depending on how long it has been sense you were preapproved last. Your lender at this point should request a copy of the purchase contract for the home.
Step 5 - Home Appraisal
After your application has been submitted, the lender will order an appraisal of the property you intend to purchase. The appraiser will visit the property and determine its value. This value will be used to help ensure that the loan amount you are requesting is appropriate. Once the appraisal has been completed, the lender will provide you with a “Loan Estimate” which outlines all of the costs associated with obtaining the loan.
Step 6 - Review by Underwriter
At this point, the underwriter will review your file to make sure everything checks out and all the requirements are met. If everything looks good after a few reviews, you’ll receive a “clear to close” notice from the underwriter. If there are any issues that need to be addressed, they will be outlined in this notice as well. Once all of the issues have been resolved and everyone involved has signed off on the loan documents, it’s time to close on your new home.
Step 7 - Attend Closing
At closing, you (the borrower) will sign all of the necessary paperwork related to taking out the loan. The seller will sign over ownership of the property, and then everyone involved in funding and processing the loan will receive their appropriate disbursements.
A Step-by-Step Guide to the VA Home Loan Process
Congratulations—you did it! Purchasing a home is one of the most exciting things that you'll ever do. And if you're eligible for a VA loan, it can be one of the easiest things, too. Just remember to follow these steps to the VA home loan process:
- Determine your eligibility for a VA loan.
- Get prequalified and then preapproved for the loan.
- Find a real estate agent.
- Submit an offer.
- Receive Appraisal and go through underwriting
- Attend closing and sign the final loan docs
The VA home loan process may seem daunting at first, but if you take it one step at a time it’s actually quite simple. Just remember to find a lender you trust, get pre-qualified for the loan and gather all of the necessary documentation before applying.
By following these steps and working with a lender like Military HomeSpot Lending, buying a home with a VA loan is simple and straightforward. Before you know it, you’ll be closing on your new home.