How to Prepare to Apply for a VA Loan
When you’ve finally decided it’s time to buy a home, a lot of things can start moving quickly. However, if you aren’t prepared, the VA loan application process and take much longer than you would like.
VA loans already close slightly slower than most other loan programs, but the wait is well worth it. They’re usually the best loan program available for those who are eligible, due to their low mortgage rates and 100% financing.
To make sure that the VA application process goes smoothly, there are a few steps you’ll want to take to prepare. These won’t take much time, and they can save you from plenty of stress down the road.
Check your eligibility
Before you start the application process, double check to make sure that you’re eligible. A full list of requirements can be found on the VA page, but generally speaking, the VA loan is available to veterans, current service members and surviving spouses.
Next, you’ll need to apply for a Certificate of Eligibility (COE). You need a COE so your lender can verify that you’re eligible for the program. You can get your COE online to save your lender (and yourself) some time.
Check your credit score
Technically, there is no minimum credit score required to be approved for a VA loan. However, lenders will want to see a score of 620 or higher in most cases.
One thing to note is that the higher your credit score is, the better the mortgage rate you’ll get. This means lower monthly payments throughout the life of the loan.
You can check your credit score through sites like Experian, Equifax and Transunion, giving you a better idea of what your score is. Keep in mind that other sites don’t always have an accurate representation of your score.
After finding your credit score, it’s smart to make moves to bump your score higher. This might mean paying off debts, holding off on opening new credit cards, etc. You want your credit as high as possible before you apply.
Make sure you have enough saved
You won’t need to pay a downpayment for a VA loan, but that doesn’t mean that you don’t need money. Upfront costs will be needed at closing, and those can range in the thousands.
Also, you’ll need to budget to pay your monthly payments. You’ll also be in charge of your own repairs and replacements, costs that renters don’t need to cover. If your new home will have a yard, you’ll need to buy a lawnmower. If you’re getting more rooms, you’ll need to buy furniture.
There’s no set amount that you should save before buying a home, but going through and calculating how much money you think you’ll spend will give a better idea of how much you should store before applying.
Get your documents together
Once you’re ready to apply for a VA loan, you’ll be getting in touch with your lender. But before they can pre-approve you, they’ll need some of your information.
To save them the hassle of looking it up themselves or to prevent having to schedule a second meeting in the future, make sure that you have the following documents with you when you apply:
- Certificate of eligibility
- Credit report
- Proof of income/employment history (W-2)
- Bankruptcy information (if applicable)
- Personal information (name, address, SSN, etc.)
If you’ve prepared well enough, you’re going to make this process a lot easier for your lender.
Before anything, you can begin the pre-qualification process. This is just a quick process to help you find out how much home you can afford.
While pre-qualification is fast and easy, it’s also the first step in buying a home with any loan program.