The VA Loan Process: Preapproval to Closing Steps

Last year, more than a million Veterans and active duty service members successfully completed the VA home loan process while benefiting from the VA loan’s $0 down payment requirement and the lowest average interest rates in the mortgage market.

Although there isn’t a one-size-fits-all procedure, the majority of military and Veteran homebuyers followed these procedures in order to receive the keys to their new home:

The process of buying a house might seem overwhelming if it’s your first time, but the first step is straightforward: getting a preapproval for a VA loan.

VA Loan Preapproval

Before actively looking for a home, savvy homebuyers realize that being preapproved for a VA home loan is essential. There are two benefits to having a preapproval letter in your possession from a reputable VA loan lender:

Having the support of a lender preapproval letter might be the difference between going under contract and having your offer rejected in a competitive housing market. Knowing that you can afford the house offers the seller comfort.

How to Get a VA Loan Preapproval

Contact a VA-approved home loan lender when you’re prepared to begin the preapproval process for your VA loan. Top VA loan providers can verify your eligibility for a VA loan by retrieving your Certificate of Eligibility from the VA’s automated system.

If you are eligible for VA service, lenders will collect the following information to complete your preapproval for a VA loan:

Lenders require a variety of papers to verify a borrower’s financial status before preapproval may take place. These records might be, but are not restricted to:

Of course, your lender can provide you with a checklist of what they want in order to provide your preapproval if you don’t immediately have these documents.

How long does it take to preapprove for a VA loan?

After obtaining all the paperwork required to use an Automated Underwriting System (AUS) to confirm your eligibility and financial situation, top VA loan lenders may frequently get you preapproved for a VA loan right away. The pre-approval procedure usually takes the longest only to compile your financial records.

When you have a letter of preapproval in your possession, the exciting process of home searching can begin!

House Hunting

Even though it may take some time, looking for the ideal house for you and your family can be a lot of fun, especially if you have an experienced real estate agent on your side. Finding a real estate agent that is familiar with the VA home loan program and has experience working with veteran homeowners is crucial.

Military-friendly real estate agents are aware of how to take advantage of VA home loan advantages and search for houses that meet VA guidelines. For instance, VA loans may be used to fund a range of property kinds, including:

The property must, however, adhere to VA minimum property standards in each case. To ensure that the entire VA loan process runs well, the proper agent will know what to look for and be able to communicate directly with your lender.

Ask your lender for a recommendation of a local agent if you don’t already have one in mind.

Going Under Contract

It won’t take long for a seller to accept your purchase offer once they have your VA loan preapproval letter in the hands of a reliable realtor. Being accepted for your offer is sometimes referred to as going “under contract,” since it marks the official beginning of discussions between the buyer and seller for the purchase of the property.

Even though having your offer accepted is wonderful news to be happy about, there are still several procedures to complete before you can move in:

Your lender should be able to inform you at this time about the closing charges you may anticipate, such as realtor fees, title fees, or loan fees. In the course of ongoing discussions, some buyers request that the seller pay a portion of these closing fees.

Your lender will proceed with the subsequent phase in the VA loan process, underwriting, while you and the seller work out the specifics of the purchase agreement.

VA Loan Underwriting

The procedure that lenders utilize to convert your preapproval for a VA loan into an authorized (and extensively scrutinized) mortgage is called underwriting. Your lender will start the investigation to make sure you can afford the house at the price listed in your purchase agreement.

Your responsibility as a borrower is to swiftly deliver any additional papers required by your lender in order to prevent delays in the closing process. A substantial shift in your income or debt, such receiving a new credit card or an auto loan, should be avoided as well. If you have any questions along the route, get in touch with your VA loan staff.

Before wrapping up your loan file and giving it the “clear to close,” the underwriting team will wait for the VA appraisal to be completed.

Closing on a VA Loan

The VA loan closing procedure is quite similar to other mortgage closings, and getting your mortgage closed is a big accomplishment. Your Closing Disclosure is where it all begins.

The Closing Disclosure

A Closing Disclosure must be sent to you by law three days or more before the loan closes. Your Closing Disclosure will include any amounts you could owe on closing day, such as:

In order for you to completely understand what you owe and why, your lender will go over this paperwork with you and address any questions you may have.

To be sure nothing significant has changed since the property entered into contract, buyers frequently decide to conduct a last walkthrough of the property right before closing.

What to Expect on Closing Day

Be prepared to sign your last piece of paper. Each piece of the closing paperwork that your title firm has produced on your and the seller’s behalf will be explained to you in detail. You will pay the remaining down payment, if any, as well as your portion of the closing fees after all the paperwork is in place.

The closer will enter the deed, mortgage, or deed of trust into the local land records after the closing. You will receive the deed as the grantee when it has been recorded, and the lender will receive the security document. Until your loan is fully repaid, the security instrument is still listed as a lien on the property.

What is the final and most crucial stage in the VA loan process? Once you get your new home’s keys, it’s time to rejoice!