How do I use My VA Loan?
If you are thinking about purchasing a new home, this is an exciting step. Using the VA Loan can yield benefits to those who are qualified, including 100% financing, no down payment, no prepayment penalties, and no private mortgage insurance. The VA Loan Guarantee Program pledges to pay back 25% of the home loan to the lender should the borrower default. Essentially, it is the government co-signing on your loan which enables the borrower to get an array of benefits that other loans do not offer. However, there are certain steps that must be taken in order to purchase a new home using a VA loan.
To prove eligibility, you must submit a request for a Certificate of Eligibility. Those who have served for 181 days during peacetime or 90 days during wartime may be eligible, as will those who served in the National Guard or Reserves for a minimum of 6 months. Unmarried surviving spouses of veterans who were killed during service will also qualify in many cases. You can complete a form online or work with a VA-approved lender to request this certificate and get the ball rolling.
The next step towards taking out Veterans Home Loans is to go through a pre-qualification process. You will need to meet with a VA-approved lender to go over your financial situation to obtain a pre-qualification letter, which many real estate agents require before they will start showing homes to you. The lender will look at your credit history and current income to qualify you. With a VA loan, these requirements will be relaxed to allow those with less than perfect credit to qualify.
Finding a Home
Working with a realtor, you can start looking for the dream home in your area that will best suit your family’s needs. Veterans Home Loans can be used for single-family residences, condos, manufactured homes, or farm residences. Once you have found the home of your dreams, the next step is to make an offer.
Obtaining the Proper Documentation
The process doesn’t end with making an offer. You will then need to follow up with the VA-approved lender to start the loan process. They will need to verify your financial details in greater detail to see if you qualify for the loan. Further documentation includes an appraisal undertaken by a VA Certified Appraiser, a title search, and a survey of the property and plot. You will also be required to purchase home owners insurance in order to qualify for Veterans Home Loans.
With all of these steps taken care of, you can go through a final walk through of the property, before becoming a new homeowner.