By Jay Leon
Buying a home with a VA home loan is similar to any other kind of mortgage loan, with a few exceptions. Before getting a loan, the buyer must prove that he or she is a military veteran entitled to a VA loan, and get an expert appraisal of the property. Once the veteran is deemed creditworthy and the property's estimated value matches the requested loan, the veteran can be approved for the loan. The Department of Veterans Affairs will guarantee the loan, and this is usually enough for lenders to not insist on a down payment.Obtain a Certificate of Eligibility from the Department of Veterans Affairs. Download VA Form 26-1880 from the VA website, or order it over the phone by calling 1-888-244-6711. Complete the form and mail together with required supporting evidence to the VA Eligibility Center in the address shown in the form. As an alternative, register at the Veterans Information Portal and apply for your COE online. If you have already chosen a lender, he or she can request the certificate on your behalf through webLGY, also in the VA portal.
Find a lender and pre-qualify for a VA home loan. It is not necessary to do this early, but it is wise to do so, so you can have an idea how much of a VA loan you can get. Inquire with a mortgage lender that specializes in VA home loans. The lender will need information about your (and your spouse's, if married) assets and liabilities. After reviewing your credit history and overall financial situation, the lender will give an estimate of the loan you can be approved for.
Search for a new home to buy. Look for homes for sale online in real estate websites. These sites let you customize your search. You can narrow your search to specific details such as price range, number of rooms and lot size or acreage. Contact a state-licensed real estate agent to assist you. The real estate agent can recommend homes that fit your specifications and take you on a tour of the ones you are interested in. Ask for a good house inspector to inspect the property. When you find a home you like, sign a purchase agreement making sure it is subject to the approval of your VA home loan.
Request an appraisal of the property. Have the lender take care of this for you. A licensed appraiser will make an estimate of the property's value, known as a Certificate of Reasonable Value, to let the VA and lender know whether the loan you want matches the value of the home. Note that an appraisal is not the same as an inspection. Make sure you buy a home that meets your standards since the VA appraisal makes no assurances as to its condition.
Submit your VA home loan application. Talk to your lender about the application process. Send your Certificate of Eligibility which you obtained earlier, together with other required documents such as proof of employment and appraisal form. If you have chosen a lender that is allowed to process loans automatically, you can be approved for a VA home loan as soon as the appraisal certificate is received. But if the loan requires VA approval first, the lender will turn over your application to VA. If your paperwork meets requirements, your loan will be granted.
Close the loan. Provide whatever additional information the lender requires, so that the home loan paperwork can be completed. A promissory note and deed of trust which puts your house as collateral for the loan will be made. Afterward, the lender will transfer the loan to an escrow and you will be given an HUD-1 that itemizes the expenses relating to the transaction. Pay all applicable funding and closing fees, take possession of the property and move in.
Get your credit report several months before you start looking for a home. This will give you time to review and correct any mistakes.
Compare VA home loan lenders. Do your research.
Be aware of veterans' privileges and rights. The VA home loan guaranty program protects veterans from being charged commissions and very high closing costs. Disabled veterans may be exempt from having to pay funding fees.
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