Obtaining a VA Home Loan

When a person has served in the military and wants to purchase a house, one of the first things they should do is look into a VA home loan. This loan enables a buyer the chance to purchase a house with no money down. It’s possible they may not be required to pay mortgage insurance every month. There could be limitations on closing costs paid by the buyer. And an appraisal detailing the value of a property could also be provided.

What Amount of Time Is Required?

Answering this question with any accuracy can be difficult. The majority of VA loans are able to be closed within 45 days. This is common in the mortgage industry. There are a number of steps in the approval process and getting preapproved is one way to shorten the closing time. Preapproval means a person has met the lender’s basic requirements for a loan before starting the process. The timetable for a seller to move out of the house and a buyer to move into the house can impact the closing time. An agreed upon moving date can also make the process longer or shorter. The VA appraisal also plays a role. Should the appraiser make the loan based on necessary repairs, the closing date could be extended by weeks and sometimes even months. After an appraisal, the VA loan must then go through the underwriting process. This is the final step. The need for more documentation or resolving eligibility issues can cause the closing date to be extended.

How much income do I have to make to get approved?

When a person applies for a VA home loan, they will hear about a formula known as the debt-to-income ratio (DTI). The DTI takes the VA loan applicant’s monthly debt payments and compares them to their gross monthly income. A lender will focus on monthly debts such as the cost for housing, unsecured debts and more. The DTI ratio benchmark for a VA loan is approximately 41 percent. When it is more, a lender may want additional financial information. Should a person have a high percentage of debt when compared to their income, they shouldn’t give up. Some lenders will provide a VA loan with higher DTI ratios.

How much time do I need to have on active duty to get a VA loan?

The first step in applying for a VA loan is to complete and submit VA form 26-1880. This is to request a Certificate of Eligibility. This certificate is provided by the Veterans Administration. It is proof a person is eligible for a VA loan. It does not guarantee a person will be approved for a loan. The length of time required on active duty is determined by when a person was in the military. A person who served in the Gulf War must have completed 24 months of continuous active duty or for at least 90 days and received an other than dishonorable discharge. A person will qualify if they served during this time for less than 90 days but have a service-connected disability. To learn specific length of service requirements for a VA loan, contact the Veteran’s Administration.

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