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Your VA home loan game plan

If you’re thinking of using a VA loan to buy a house, here are some guidelines to help keep you on track and on schedule.

Eligibility depends on your length of service, duty status, and character of service. In general, if you serve 90 consecutive days of active duty during wartime, 181 days during peacetime, spent more than six years in the National Guard or reserve, or are the spouse of a service member who died in the line of duty, you qualify.

Tip: The VA is available to help you from the start. Check in with your Regional Loan Center for guidance.

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You’ll want to find a real estate agent who is familiar with VA home loans, which are offered by private lenders but partially guaranteed by the Department of Veterans Affairs, and a lender that participates in the program. Luckily for you, most lenders do, and many veterans groups provide lists of VA-friendly real estate professionals. In each case, talk to more than one. With lenders, be sure to compare interest rates, discount points, closing costs and credit requirements.

While you’re shopping around for a lender with the best terms for you, you’ll want to apply for a Certificate of Eligibility (COE). Once you pick a lender, this will verify to them that you are qualified for the VA home loan.

Unlike an official pre-approval, this is an informal estimate from the bank about how much you can afford to spend on a home, and will generally tell you how much the bank is willing to lend you. Because it’s not an official pre-approval, a pre-qualification is usually free and non-binding. Keep in mind that you may pre-qualify for more than you have budgeted. Be sure to know what you can afford and stick to that number.

a house

You will likely work with your real estate professional and lender for this part, but you want to make sure that the agreement contains a VA option clause. During this stage, you’ll probably want to start gathering your pay stubs and bank statements and other documents for your mortgage. These documents will also come in handy when you are ready to apply for the VA home loan.

Work with your lender to complete the loan application. You’ll need your purchase agreement and a variety of other documentation, such as paystubs, tax forms, and bank statements, plus forms from the VA.

Loan processing can take a few weeks or more, and will include a mandatory appraisal for the VA. Usually, your lender will arrange this and the VA will sign off on it. This appraisal, which may be more stringent than a conventional appraisal, looks at the condition of the home and its value and is meant to protect both you and the lender. It generally costs a fee and typically takes at least 10 days.

Tip: Now may be a good time to order an inspection of the home, to make sure there are no hidden problems with the property.

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The lender will generally choose a title company and attorney to conduct the closing. A representative of your lender will likely coordinate the date and time that the property is transferred to you.

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Disclaimer

The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America and/or its partners assume no liability for any loss or damage resulting from one's reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment management.

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