Pre-qualification & pre-approval
VA loan pre-qualification and pre-approval requirements can vary by lender, but this is a critical first step. VA lenders are often looking for a FICO score of at least 620, a benchmark considerably lower than what you’ll typically need for conventional financing. Getting pre-qualified and pre-approved gives borrowers a clear sense of whether they’re ready and what they can afford. It also shows home sellers and listing agents that you’re a strong home-buying candidate.
Getting under contract
Signing a contract to purchase a home comes next. This is a step where real estate agents who know VA loans can make a big difference for military buyers. Buyers can use this program to purchase single-family homes, condos, multiunit properties, and more. But the VA also wants veterans getting “move-in ready” homes that meet some basic health and safety conditions. The VA allows sellers to pay all of a buyer’s mortgage-related closing costs and up to 4% of the purchase price in concessions, which can include things like prepaid taxes and homeowners insurance and even paying off collections. VA-savvy agents can help you draft a competitive offer that maximizes the program’s benefits and your bottom line.
Once you’re under contract, your lending team will order an appraisal, which is conducted by an independent VA appraiser. This appraisal process has two parts: determining the home’s value and whether it meets property condition requirements. Lenders will typically need at least one good recent comparable home sale to support the property’s value. Contrary to common misconception, VA buyers are allowed to pay for repairs in order to satisfy the property requirements.
Like with any other mortgage, a lender’s underwriting team will review your loan file for completeness. You’ll need to meet guidelines set by both the VA and the lenders.
Now it’s time to celebrate! Most VA loans close in 30 to 45 days, which is the same as conventional financing. You’ll sign a stack of paperwork and get the keys to your new home.
Hopefully these tips have helped you on your home-buying journey!