Home sellers value the buyers with pre-approval letters. With them, home sellers get the idea that you are a serious and strong home buyer and won’t cause any debt problems. Failing to get one may urge the sellers to deny your home buying offer.
VA loan is a pathway to a new home for those who honorably served or currently serving the U.S military. But it also requires pre-approval. It has few unique demands that an applicant must fulfill to qualify for it.
You may be considering applying for a VA loan but have no idea from where to start exactly. This article explains the complete process of getting pre-approval for a VA loan and whether you are eligible for it or not.
VA loan and its advantages
It is formulated explicitly for former or current military persons and unmarried surviving spouses. For them, it is the simplest way of getting homeownership. The advantages that VA loan offers are:
- No down payment
- No private mortgage insurance
- No pre-payment condition
- Benefits can be reused
- Loan can be refinanced
- Little closing costs
It is allowed for all veterans who were discharged other than being dishonorable. This includes all members who serve in uniform:
- U.S. Army
- U.S. Navy
- U.S. Marine Corps
- U.S. Air Force
- U.S. Coast Guard
- U.S. Space Force
- Army National Guard and Air National Guard
- Reserve members from the military branch
- Cadets of U.S. Military Academies
6 steps you must follow to get pre-approval for a VA loan
Collect your important documents
Before you apply for pre-approval, collect all of your official financial documents. Without your papers, you cannot precede the process smoothly.
Gather documents related to your income, monthly expenditures, debts, most recent pay stubs, tax returns, bank statements for loans, credit cards, and investment. You will need to show them as proof for qualifying for a loan.
Select your preferred VA loan lender
Every bank and lender does not offer VA loans. Only approved mortgage companies are eligible to offer them. Compare the offers from various VA loan companies and choose one with the highest experience in them and the best deal. This step ensures that you get yours effortlessly and as early as possible.
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Fill out your VA loan application
After you have chosen your VA loan lender, you have to fill the pre-approval form. The form demands you fill out your details about your income, debts, credit card, mortgages, taxes, insurance, and other financial information.
If your spouse is applying with you, you have to fill in all of these details for your spouse. Lenders use this information to appraise whether you have the financial capability to pay off the loan and what the risks are with offering you a loan.
Get your COE
You need a Certificate of Eligibility (COE) from the Department of Veterans Affairs before you get preapproval for a VA loan. You can get your COE by logging in eBenefits portal and requesting it. Sometimes, your VA lender also gets the COE on your behalf to smooth out the process.
Discuss with your loan officer
Discuss with your loan officer your finances and goals. Tell him how you plan to pay off the loan and how you consider yourself eligible for the loan. The loan officer may ask you specific follow-up questions and inquire about your salary, employment, and financial situation.
Get your pre-approval letter
Once you have done all the steps mentioned earlier, the VA lender will look into your information and evaluate your eligibility. If you are eligible, you will get an official preapproval letter.
This letter approves that you are in a stable financial condition to get a VA loan. It also gives you the estimated loan that you can borrow. Don’t overwhelm yourself to borrow the loan exactly mentioned in the letter, it’s just an estimated upper limit of loans that you can get.
Now, you can start hunting for your new home. Don’t forget to attach your pre-approval letter with your offers for buying a home. This will give you a buying edge over others because sellers feel confident dealing with buyers without any financial issues.