How to Use a VA Home Loan to Make Money

By Don Rafner

If you're a veteran of the U.S. Military, or if you're serving in the Armed Forces now, you might be eligible to take out a home loan insured by the U.S. Department of Veterans Affairs (VA). These loans are worth taking out because they don't require down payments. This means that it's easier to make money on a home purchased with the help of a VA loan when it's eventually time for you to sell.

Build the financial evidence that your gross monthly income is high enough that you can easily make your monthly payments on your VA loan. Make copies of your credit card bills, other loan statements, two most recent paychecks, current federal income tax return, and savings and checking account statements. Most lenders prefer that your monthly debt payments, including your new estimated mortgage payment, be less than 36 percent of your gross monthly income.

Obtain your Certificate of Eligibility from the Department of Veterans Affairs. This certificate provides proof that you served or are serving in the U.S. Armed Forces, and that you qualify for a VA loan. You can request this certificate directly from the department's website. You can also request that your mortgage lender obtain the certificate on your behalf.

Call several mortgage lenders to compare potential interest rates and closing fees. Once you select a lender, tell your loan officer that you are interested in obtaining a VA-insured home loan.

Fill out your lender's loan application, either online or on paper, and send it to your lender. Also send your lender your Certificate of Eligibility and the copies you made in Step 1.

Sign the closing papers to make your VA loan official if your lender approves your application. You'll also have to pay origination and closing fees at this time.

Hold onto your home for a long enough period of time that it's value rises to a level at which you are comfortable, then put your home on the market and sell it for a higher price than what you paid. Your profit will be higher than most homeowners' because you'll not have put down a down payment for your home. You will have paid less into your loan than owners who sold their traditionally financed residence after the same number of years for the same amount of appreciation.

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