The VA Purchase Loan Process
If you are either a Veteran or an active member of the military, you can obtain a VA Home Loan using the VA benefits you are entitled to. If you qualify, the program lets you purchase a primary residence with up to 100% financing.
What that means is that, at closing, all you would need to pay is the loan’s closing costs. It is possible, however, to buy your home with little or no money out of pocket, with seller concessions. Unlike other loans, the VA Home Loan doesn’t require mortgage insurance. A VA Purchase Loan is also known as a VA Home Loan.
Obtaining VA Home Loans involves a few basic steps. The more information you have about the entire process, the more you will see just how straightforward the process actually is. Aside from requiring a Certificate of Eligibility and having a VA-assigned appraiser, the VA purchase loan process is incredibly similar to the traditional loan process.
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Here are the steps to take:
- Obtain a Certificate of Eligibility (COE): If you are a veteran, you can obtain your COE by filling out Form 26-1880, and mailing it together with proof of military service, to an eligibility center. In most instance, you can obtain a COE from a lender using the automated certificate of eligibility (ACE) system.
- Find and Choose a Home for Sale: With the assistance of your real estate agent, you can choose to sign a purchase contract conditioned on the approval of the loan. A pre-approval from the lender can simplify the process, but it won’t necessarily replace the condition of final approval.
- Present the COE to the Lender and Complete the Loan Application: The lender will compile all income and credit information. They will also arrange for an appraiser licensed by the VA to determine a reasonable value for the property.
- The Lender will then Determine Whether the Loan is Approved After Completion of the Appraisal. Lenders typically take into account the income and credit information along with the property’s appraised value as well as other factors to reach a decision. If your lender is approved by the VA to process home loans via the automated system, the loan can be approved upon receiving the appraised value determination.
- Finally, You Can Close the VA Purchase Loan and Move into the New House: The lender and closing attorney or title company will coordinate the process of closing and explain the key loan terms and requirements.
All this is critical information you should have at your disposal before you even attempt filling out the first form. You should not start applying for the VA purchase loan eligibility or even the loan itself if you don’t have the necessary details at your disposal whenever you need them. You can count on the mortgage advisor to answer all your questions and guide your through the process.