Veteran Affairs Loan
VA Loan Process
1
REVIEW LOAN TERMS AND
CONDITIONS ONLINE
2
ENSURE ELIGIBILITY AND
RESIDENCY REQUIREMENTS ARE MET
3
GATHER BANK AND INCOME STATEMENTS,
IRS FILINGS, DD214, AND
OTHER FINANCIAL
DOCUMENTS
4
GET PRE-QUALIFIED BY
FILLING OUT A LOAN
APPLICATION
5
FIND LAND OR USE
VLB AVAILABLE LAND TRACTS
6
WORK WITH VLB LOAN
PROCESSOR TO COMPLETE
REQUIRED DOCUMENTATION
(INCLUDES SURVEYS)
7
SCHEDULE A CLOSING DATE
HAVE FINANCING FINALIZED
DOWN PAYMENT READY
MORE INFO
NO DOWN PAYMENT REQUIRED
Most lenders require a down payment of at least 3 percent of the home’s purchase price, according to Bankrate.com. On a $200,000 loan, that’s $6,000 due up front.
NO PMI (PRIVATE MORTGAGE INSURANCE)
Many lenders require private mortgage insurance if you make a down payment of less than 20 percent of the purchase price. The most common way to pay for PMI is through a monthly premium, added to your mortgage payment. VA loans don’t require it.
NO MINIMUM CREDIT SCORE REQUIRED
Instead, VA requires a lender to review the entire profile of the borrower in making a lending decision. On average, those who qualify for VA loans have lower credit scores than those who apply for conventional loans, according to data in the Ellie Mae Origination Insight Report. In September, the average credit score for veterans who had closed on a VA loan that month was 709 for home buyers and 701 for refinancing; for those using conventional loans, those figures were 752 and 731, respectively.
NO MAXIMUM DEBT RATIO
However, if the ratio is more than 41 percent of income, the lender must provide information about factors that could compensate for that gap.
NO LOAN MAXIMUM
Instead, VA requires a lender to review the entire profile of the borrower in making a lending decision. On average, those who qualify for VA loans have lower credit scores than those who apply for conventional loans, according to data in the Ellie Mae Origination Insight Report. In September, the average credit score for veterans who had closed on a VA loan that month was 709 for home buyers and 701 for refinancing; for those using conventional loans, those figures were 752 and 731, respectively.
SAFEGUARDS IN PLACE
There are guidelines to ensure veterans have the capacity to repay their mortgage and other debts while accounting for all living expenses. There are also minimum property requirements to ensure the property is safe, sanitary and sound.
FIGHTING OFF FORECLOSURE
There are VA staff members dedicated to helping veterans who become delinquent on their loan. In 2016, these staff members helped 97,368 borrowers avoid foreclosure. There were 18,519 foreclosures. “It’s a start-to-finish program for us, not just close the loan and we’re out,” said Greg Nelms, chief of loan policy for the VA home loan program.