VA Loan Approval
A VA (Veteran Loans) allow approval on a home loan with $0. Get pre-approval for your loan fast and easy completely online.
Veterans of U.S. military branches experience unique situations beyond those experienced by most civilians. Obstacles and opportunities alike extend from active military service to veteran life, including financial hardship and assistance purchasing a home. VA home loans are available to qualified U.S. veterans to help buy homes but it is important to understand all options and terms before submitting any applications.
Preapprovals, rate-comparison calculators, and applications are all available online today. Qualified veterans also want to know how take advantage of a $0 down payment offer for a new home purchase. Read ahead for an informative guide on what you need to know about the VA loan approval process now.
VA Home Loans 101
The U.S. Department of Veterans Affairs (VA) began financing secure home loans for military veterans in 1944 as part of the GI bill signed into law by former President Franklin D. Roosevelt. Programs are flexible, offer $0 down payment options and have proven their value repeatedly over many decades. In no other time have VA home loans and their veteran-friendly terms been more helpful to former serviceman in times of need than they are today. The loans are not facilitated by the U.S. federal government, however. The VA provides a type of insurance on each funded loan, known as a partial guarantee, which allows veterans to secure financing and annual percentage rates (APRs) for which they otherwise might be unable to qualify or afford. This means VA home loans are funded by commercial mortgage lenders whose funds are in turn (at least partially) backed by the government. Financing options offered to veterans therefore include significant unique benefits not available in regular loan programs.
Who Qualifies for a VA Loan?
Qualifying for a VA loan is like qualifying for a standard mortgage loan. Credit score (FICO), income and employment history each play a role in your approval process. VA home loans do have additional qualification scenarios unique to U.S. veterans as well.
For example, 181-days of active peacetime or 90-days active wartime service are required. Members of the National Guard or Reserves need to have served at least six years to qualify for VA loan programs. The home you purchase or refinance with funds from a VA home loan is required to be your primary place of residence. Surviving military spouses have their own set of requirements as well. For example, surviving spouses of U.S. veterans must be unmarried when applying for a VA home loan. The deceased husband or wife must have died while engaged in active service or from a service-related disability. Alternatively, the deceased husband or wife might also have died of causes unrelated to his or her disability but was still completely disabled. The latter scenario is only approved under specific qualifying circumstances, however. Finally, you might also qualify for a VA home loan as a surviving spouse if your husband or wife is either a prisoner of war (POW) or missing in action (MIA).
Reasons Veterans Need VA Home Loans
Multiple reasons exist for U.S. veterans to rely on VA home loans to get approved for a home mortgage program. Military-related physical, mental, and emotional issues sometimes lead to financial hardship. Income for those serving in the U.S. military branches is steady but not always on-par with average pay across the country. Family expenses are therefore often higher for military households when pay is lower. Military families are also frequently required to move. Repeated changes in towns and states of residence make it challenging for military spouses to hold down jobs and get hired for new ones. Jobs they do get are often for lower pay and fewer responsibilities because their employers are aware they might have to relocate again soon. A few more reasons veterans need VA home loans include:
Temporarily paying two mortgages is common during relocations until former homes are sold.
Paychecks are not always made or received on time (or accidentally at all) during deployment.
Military families are extended many offers for credit but few options for resolving high debt.
Some moving expenses are covered but unexpected expenses are often incurred.
Admission of high debt might jeopardize security clearance status.
How to Apply Online - Documents and Information Needed
Documents needed when applying for a VA loan include those required for a regular mortgage application processes plus specific forms and information related to active or former military status. Proof of identity, address and U.S. citizenship or residence status are required. A state-issued driver’s license or other valid photo identification and your Social Security Number (SSN) are needed. Proof of income via a minimum of two-years tax returns is also required.
Veterans must provide a copy of their discharge or separation papers (DD214). Active servicemembers must provide proof of the day they began active duty, duration of any time lost (if applicable) and the command name providing this information. Application requirements are slightly different for National Guard and Reserve members of various statuses. Surviving spouses must submit a completed VA Form 26-1817 and complete additional steps. Exact online application steps are different with each mortgage lender. Contact yours for more information on its exact online application requirements today.
Expected Rates from Banks Offering VA Loans in 2021
Veterans United is one of the top VA loan providers today. Convenient rate calculators are provided on the Veterans United website for both VA purchase and refinance loans. APRs vary greatly based on your credit score, income, lender policies and the state in which you live. APRs are also impacted by the length and type of mortgage you receive. For example, a fifteen-year mortgage term on a fixed VA home loan is approximately 2.620 percent but the APR on a thirty-year fixed loan is 3.240 percent. A 5/1 ARM APR is currently 3.910 percent and a 7/1 ARM Jumbo APR is 3.530 percent.
The U.S. Department of Urban Development and Housing (HUD) works in tandem with the VA and the Federal Housing Administration (FHA) to provide affordable housing for U.S. veterans. The HUD Veteran Resource Center (HUDVET) also facilitates homeless assistance and prevention programs for veterans. Some of the best commercial banks and lenders for VA loans on the private market in 2021 include: