When buying and financing a home with a VA home loan, one of the most important things you can do is to find and use an approved VA lender. Mortgage companies can offer and originate the gamut of mortgage loans including VA, FHA, USDA, Fannie and Freddie product. Yet the VA mortgage has certain underwriting components that unless the lender is familiar with them then it’s possible the loan application will be hampered or even declined when it didn’t need to be. If the VA lender isn’t VA approved, your loan application will be accepted by the loan officer yet then sent to an approved VA lender for an approval. Using a VA approved lender cannot be stressed enough.
At the same time, you need to work with a real estate agent who is experienced with VA mortgages. If not, you could find your offer rejected simply due to the perceived nature of your mortgage. VA loans make for such a small percentage of all applications that not many transactions are VA purchases. And in the past, VA loans were primarily approved by the VA directly. The VA reviewed the application, ordered the appraisal directly from the appraisal and issued the approval. Unfortunately, that took weeks and even months sometimes to get the loan approved. If an agent is not aware that approved VA lenders can approve the loan without VA assistance, the seller might decline an offer under the mistaken impression that the approval will take too long.
VA loans also restrict specific closing costs the veteran is allowed to pay and many times the seller is expected to pay or at least contribute to the veterans’ closing costs. If the offer is not properly structure prior to being presented to the seller, again the offer could be refused. An agent with VA experience knows ahead of time any potential problems when making an offer and adjusts accordingly.