Understanding The Application Process For VA Loans

VA Loans Application Process Explained

One of the biggest misconceptions about the VA Loans is that they can be somewhat difficult to acquire.

This is certainly not true. We know that millions of people have availed this facility in order to get affordable loans for building their dream homes.

If you are an active military or veteran of the military, you are interested in buying a home or refinancing a mortgage you already own. You may be interested in knowing what types of financing you have at your disposal. In the USA we find the Department of Veterans Affairs offering VA loans, with which it is possible to buy a home without down payment or with a minimum down payment or refinance an existing home.

Below we will see what are the VA loans, what are their requirements and what is the application procedure.

These are mortgage loans that are backed by the Department of Veterans Affairs (VA). With a VA loan, both active military members and veterans can buy a home without down payment or with a minimum down payment or refinance an existing home with the goal of obtaining cash or a lower monthly payment.

VA Loans: Benefits.

Acquiring loans helps you acquire a home at a competitive interest rate even without borrowing for purchase help you buy a home with competitive interest rates often without requiring a down payment or private mortgage insurance.

Refinancing loans allow you to take out money from your capital to take care of concerns such as paying a debt, funding for school or making improvements to your home.

Interest rate reduction refinance loan also known as current line refinance loan can help you get a lower interest rate by refinancing your existing VA loan.

Native American Direct Loan helps Native American veterans finance the acquisition, construction, or improvement of homes on state trust lands, or reduce the interest rate on your VA loan.

Tailored Housing Grants: Helps veterans with a total and permanent disability acquisition related service or build an adapted home or modify an existing home to account for the disability.
Other Resources: Many states offer resources to veterans, including reducing property taxes to certain veterans.

What are VA Loans?

VA or Veterans Administration itself does not lend the money to the veterans for house building purposes. Instead, there is a whole host of lenders who are associated with the program and lend money to the veterans. Experts say that it is quintessential that whenever you look to acquire a house building loan, always ask the lender about the involvement in the VA Program. Nowadays, there are many experts and dedicated departments which help the people in understanding the demands and conditions of the loans so that they can make better decisions.

Major Requirements

VA Loans Application Process Explained

VA Loans Application Process Explained

One of the main requirements of acquiring this loan is that you need to present a certificate of eligibility that confirms your involvement with the military career. Now this is where the extra help comes handy. Lenders who have experts regarding the VA Loan tend to get the certificate more easily than someone who tries to do it all by himself. Usually a DD form 26-1880 is required to be filled and submitted for the issuance of the Certificate of Eligibility.

Like any other program, if you are to apply for the VA House Building Loan, then it is necessary that you have a good credit record. It is understandable as any lender would want a certain degree of confidence that the money he/she is lending would be returned in due time. As far as this particular loan is concerned, a minimum score of 620 is a must. Before your application can pass on for processing, the credit score is verified and only those who meet the criteria are considered.

Supplementary to the above stated requirement, the person applying for the loan also has to present his/her information regarding monthly income. There are several ways to do that. Income tax forms and tax receipts are some of the examples. It is also important to note here that down payment is not usually required for this loan. The army veterans are entitled to a certain amount of loan. The basic amount is $36,000. However, this is subject to change depending on the area and an amount more than $400,000 can also be received as the House Building Fund.

Another requirement for the acquisition of this loan is the payment of the one-time funding fee. For those who have not submitted any down payment have to pay 2.15 percent of the loan amount whereas those who have submitted 10% down payment have to pay only 1.25 percent. Finally, it is also important to know that appraisers might visit the property at any time in order to determine whether the house meets the required conditions. These include a proper electrical and water supply system as well as housing quarters that have acceptable designs.

VA Loans: How to apply?

Acquire loans and refinance: Obtained through a lender of your choice once you have obtained the certificate of eligibility. You can get a COE through eBenefits, by mail and often through the lender.
Refinancing loan of interest rate reduction.

A new certificate of eligibility is not required. You can take the eligibility certificate to show your right use in advance or your lender can use our confirmation email procedure instead of a certificate of eligibility.

Native American Direct Loan. Firstly confirm that your tribal organization participates in the VA direct loan program that is obtained through a lender of your choice, once you have obtained a Certificate of Eligibility (COE). You can get a COE through eBenefits, by mail, and usually through your lender.

You can apply for a SAH or SHA grant either by downloading it and completing the Form VA Form 26-4555 (pdf) and submitting it to your nearest Regional Loan Center, or completing the online application.

As a requirement for a VA home loan, the Veteran or Veteran’s spouse must certify the occupation of the property. Now, the dependent child of an active service member can satisfy the occupancy requirement for a VA home loan.