Tips from a VA Mortgage Expert

Statistics show that only 25% of all eligible VA home buyers actually utilize their hard-earned veteran loan benefits. I have dedicated my entire professional career to assisting veterans use and understand these VA benefits as they pertain to buying or refinancing a home mortgage. Life is full of difficulties and even things we may feel are unfair, and if I can play a role in making something less difficult for our Nation’s veterans then I will do all I can to assist!

I have put a lot of thought and effort into this article and hope that all those that come across it feel that it has made the VA home loan process much easier to navigate from start to finish because truthfully, the VA home loan is a very simple and straightforward tool that can make home ownership a reality for hundreds of thousands of eligible veterans and active military.

Step 1 is getting your preapproval letter.

Getting a preapproval letter from your VA lender is one of the first steps that all veteran homeowners should take when trying to purchase a home. Before you go out and try to start buying a home you need to get a preapproval letter from your VA loan officer. The reason it is so important to have a preapproval letter in your possession is because sellers and real estate agents will not take you seriously until you have the preapproval letter. Once you have your preapproval letter you can start making offers on different homes. Have you ever seen the movie Willy Wonka’s Chocolate factory? In this movie, those lucky holders of the golden ticket are granted access to Willy Wonka’s chocolate factory. I like to compare your preapproval letter to the golden ticket given to these lucky recipients in the movie. Without the golden ticket there is no entry into the chocolate factory; however once the golden ticket is presented the doors to this amazing chocolate factory are opened. Veterans, you will notice once you have received your preapproval letter you too will have many more doors opened to you. Realtors and sellers will be much more likely to take you seriously with your preapproval letter.

What will you need to send to your mortgage representative to get your preapproval started?

For a VA purchase loan, you will need the following:

· your last two year’s W-2 statements.

· One month’s worth of paystubs.

· Form DD214 (not necessary but helpful)

This information is needed on all applicants which are normally the veteran and his/her spouse.

The reason we need your last two years W-2 statements is to verify how much money you make on average each year. The reason we will need eight months worth of pay stubs is to get an idea on average  how much money you are currently making with your current employer. In addition, to determining how much money you make your pay stubs also verify current employment. Your form DD 214 allows your VA lender to expedite ordering process of your certificate of eligibility. Approved direct lenders with the Department of Veterans Affairs have the ability to order your certificate of eligibility, which will determine if you can or cannot get a VA loan, over the internet directly from the VA. most veterans or active duty military who are applying for a home loan do not realize that the speed upon which they are getting approved is determined by how quickly they can get these necessary documents to their VA loan officer.

What will the VA loan officer or VA lender do once they have your information as described above?

Once your VA loan officer has the three items outlined above, he will plug all of your information such as employment, income, assets and liabilities if applicable into his loan origination software. Once your information is entered into the software a VA loan analysis must be run by an approved VA processor or loan officer. The VA loan analysis is a form which will indicate to the lender whether or not you can afford the home that you were trying to purchase. The VA loan analysis is a relatively simple calculation. The calculation is outlined below:

(Monthly Income)- (proposed mortgage payment+insurance+taxes+utilities for that house+monthly credit card payments due) = RESIDUAL INCOME.

What is residual income?

Reschedule income is how much money you have left over to survive with after having paid all of your necessary obligations. The VA does not want someone to buy a home that is so expensive that home does not allow them to make all of the necessary payments on time. The VA has set up certain criteria for necessary residual income based on what part of the United States who have been, how large family is, the age of your children and older variables. For example, the amount of residual income needed for a single person living in eastern Ohio will be lower than the residual income required for a family of six living in Northern California.

The VA loan process from application to loan closing/funding.

Once your VA loan officer has done your VA loan analysis and determines whether or not you can afford your home your loan will be submitted to an automated underwriting engine. The most common used automated underwriting engine is DU or desktop underwriter. Within moments of submitting your loan to the automated underwriting system, your loan officer will know whether or not you are eligible for the loan and at that point you will be denied or preapproved! As you are already aware if you are preapproved venue will be issued a preapproval letter so you may start making offers on different homes of your choice.

Let’s now assume you have made offers on a bunch of different homes and decided to pursue the home of your choice. At this point in time, you will need to be working with a real estate agent and you will need to execute a purchase contract or purchase agreement with the seller. After you have unexecuted purchase agreement you will return that purchase agreement to your loan officer and your loan process will now begin. Your loan process could take anywhere from about two weeks to five or six way depending on a couple different variables. Though it is very easy to blame your VA loan officer should things not go as quickly as you have intended, there is a lot that you can do to speed up the process. The following is a list of things involved in the loan process that may take time over the next 2 to 5 weeks:

· Title insurance must be ordered and issued

· An appraisal of the property must be done

· Home owner’s insurance must be set up and put in place

· Verbal and written verification of employment will be done on applicants

· any adverse credit may need to be cleaned up or discussed

· a VA underwriter needs to review all documents and issue final approval

· closing needs to be scheduled

though the list above may not appear complex or detailed, it is important to understand that in today’s tight economy with increased financial guidelines your loan approval and processing will take longer than it has in the past.

So what can you do to make sure you are well prepared to buy a home with a VA loan?

As I mentioned in the very first paragraph I have spent my entire professional career working with veterans and active-duty military in getting approved for their hard earned VA home loan benefits. If you take anything away from this article it is that you should be educated and make sure you’re working with a legitimate VA approved lender, bank or mortgage company. Here at we have taken the guessing game out of your hands. If you submit your loan inquiry for preapproval on our website you can rest assured that we will put your information into the hands of an approved VA lender in your area. Our website is designed to educate all those looking to find out more about their hard earned VA home loan benefits.

15 thoughts on “Tips from a VA Mortgage Expert

  1. I don’t think it is wise for one to take a loan while in a financial crisis. I have seen people in such a situation seeking loans thinking they could get out of the rut, but only aggravate it further.

  2. It is surprising that a massive 75% of veterans don’t utilize their Veterans Administration mortgage loan benefits (a suggested by your article above). I am not sure if this is due to unawareness or the lack of demand. The goal of the program was to help returning war veterans become home owners and allows veterans returning from the war to purchase homes almost immediately. VA loans are still insured by the government against default, and still offer no down payment or private mortgage insurance.

    Veterans should capitalize on the benefits offered by VA loans, including:

    – No prepayment penalties;
    – Insured against default by the United States government;
    – Lower closing costs.

    I hope your article goes out to a few more relevant readers and this gap of 25% exercising their right comes down.

  3. Thanks for all the information,very helpful. Don’t know why I didn’t get the VA loan to begin with .

  4. The reason 75% of Veteran don’t use their GI bill is the conventional and the FHA buyers will win the bids on multiple offers all the time The agents perfer these buyers. Agents do this without the sellers even knowing. when a Veteran purchase a new home if he tell them he want to use his GI bill then he shouldn’t have any problems but they will try and talk you out of using your GI bill. I think the Veterans that earn this. should get the same treatment as anyone else. I read your VA tips and I have a question. I’m selfemployed and living on retirement income and I do have W2’s and bank statements will this be a problem for me getting a VA loan?

  5. What if you already had a certificate of eligibility, and already use it, but you are selling your present home to buy a home in another state

  6. Peter,

    That is 100% fine and you can have more than 1 VA loan at a time even if you cannot sell your current home
    Give us a call and we can help

  7. If there any fees to the borrower who is using a VA Home Loan, what would those be? Would it be title/escrow? Also, let’s use an example of a loan for $300k. What exactly should I expect to pay while using the VA loan?

    Thank you.

    David M.

  8. David,

    Fees on a VA loan are very similar to fees on any loan. You will however also pay on top of any normal fees a VA funding fee directly to the dept of VA (if you receive VA disability this is waived)
    In general your fees are something like this
    Lender fees such as underwriting (250-750)
    We charge NO BROKER FEES
    Title fees (.5-.75% of your loan amt, so on 100K loan about 600 bucks)
    Recording fees (100-200)
    Prepaid mortgage interest (0-1000) depending on when you close the loan
    VA funding fee (varies between .5-3.3%)
    Feel free to call us for more specifics 866-569-8272

  9. i have the whole package ready. my dd 214 all of that. but after looking at my credit score i don’t thionk there isa much reason to go on

  10. I currently have a VA loan at 3.75%. I am a 10% service connected Vet. If you can do a 2.25% let me know. If not, no need to respond.

  11. Helpful info. Lucky me I discovered your web site accidentally, and I’m shocked why this accident did not took place in advance!
    I bookmarked it.

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