For veterans and active-duty members of the military, Veterans Administration home loans, or VA loans, are a great mortgage option with many benefits, including more lenient credit requirements and no down payment or mortgage insurance. Sellers generally expect their buyers to have lender pre-approval at the time of the offer.
1. Determine VA Loan Eligibility
To qualify for a VA loan, ONE of the following requirements related to service must be met:
- 90 consecutive days of active service during wartime
- 181 days of active service during peacetime
- 6 years of service in the National Guard or Reserves
- You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability
2. Obtain a VA Loan Certificate of Eligibility (COE)
The next step is to request a Certificate of Eligibility. Lenders may pull this directly or it can be applied for in the following ways:
- Applying online through the VA’s eBenefits portal
- Applying by mail with VA Form 26-1880
3. Prepare your Finances
Once eligibility for a VA loan is established, it’s time for financial review. What credit score is needed for a VA loan? VA loans typically have lower requirements for credit scores compared to conventional loans, but it is wise to review credit regularly and address inconsistencies before the home financing process begins.
During the pre-approval process, lenders will also consider Debt-to-Income (DTI) ratio, or gross monthly income compared to rent student loan payments or other types of debt. Lower DTI is associated with less risk.
4. Prepare Documentation
Here are some examples of the information typically requested for VA loan pre-approval:
- Driver’s license or other government identification
- DD-214 or Reserve/Guard points statements
- Statement of service for active duty borrowers
- Pay Stubs, Leaves & Earnings Statements (LES) and W-2s for the last two years
- Bank statements
- Disability award letters, which can be retrieved from the VA eBenefits portal
5. Apply to be Pre-approved!
Once these steps are completed, documentation is reviewed and a lending decision will be made. When VA loan pre-approval is issued, it not only provides assurance to sellers and listing agents but also gives buyers confidence in making their most competitive offer.
Our experienced mortgage professionals are here to guide you through the loan process and make home-buying as seamless as possible. For the men and women who have selflessly served our country, we appreciate the opportunity to provide the personalized experience you deserve when buying or refinancing a home.