How to use my VA loan to buy a house? Most veterans or service members will frequently ask this question. However, worry no more, as this article will thoroughly explain how to do it. Find the complete guide to using your VA loan to purchase a house below.
What is a VA Loan?
For veterans, a VA loan may be the best option to buy a residence. You can use a VA loan to get you a mortgage with no down payment if you’re eligible to obtain a loan issued by the Department of Veterans Affairs (VA). It’s not only limited to purchasing a new house, but you can also refinance an existing mortgage.
But remember, the ones who qualified to gain the VA loan are the US veterans, active-duty military members, and some surviving spouses. Since it is limited, please know your position. In addition, this requirement was written in the 1994 GI Bill of Rights.
How to Use My VA Loan to Buy a House?
For you who have been wondering how to make use of your VA loan, rest assured. You could easily manage it by following these six steps to get it done, from picking a lender until you’re ready to move in. See the details here.
1. Pick a VA-Approved Lender
Perhaps you’ll think that any lender would be acceptable. But you need to know that only lenders approved by the US Department of Veterans Affairs could originate VA-backed mortgages. Then, most lenders would focus on conventional loans, whereas VA lenders concentrated on providing loan programs for military clients.
Moreover, VA lenders have extensive knowledge about the VA loan process, so you can inquire about anything that concerns you. For example, you may need to know whether the loan officers are experienced in managing veterans’ loans.
2. Get a COE (Certificate of Eligibility)
Besides having a more profound knowledge about VA, VA lenders can also help you obtain a COE. By having COE, you can prove that you already meet the eligibility standards to gain VA loan benefits. Furthermore, the lender will know how much dispensation you could receive from the Department of Veterans Affairs.
To get a COE, you are required to show your lender the information about your military service first. Don’t worry. A COE can be easily acquired online via a lender’s or eBenefits portal on the website. However, if you’re one of servicemembers or surviving spouses, you may get yours by mail.
3. Pre-qualify the Loan Amount (Not Mandatory)
By pre-qualifying your loan amount, you’ll be alerted to potential surprises. It means that you can see areas that need improvement before you decide to move in. But you’ll need to show your VA loan professional your credit history, marital status, employment, and income.
Indeed, a prequalification letter does not guarantee approval for a loan. However, it does give you an estimated price range for house hunting later. The approval by the lenders should be verified according to the information you’ve provided in advance.
The pre-qualify step is not mandatory. However, if you decide to go through this step, remember to ask all the questions you need to know. For example, if you have additional assets that give you a higher probability of getting a loan, inform the lender about it.
4. Start House Hunting and Sign the Agreement
Going house hunting may be a pleasant step to obtaining a VA loan because this step allows you to look at homes you might buy. The house-hunting process can also be accompanied by a real estate professional so that you can make sure that you’ll get most of the property’s benefits.
Moreover, going house-hunting with a real estate professional lets you avoid being concerned about certain costs and fees. These miscellaneous fees will be paid by the seller (if either you and the seller agree), and the professional agent will help you negotiate seller-paid prices.
Bear in mind that you’ll need to check these property requirements:
- The heating should be adequate,
- Basements and crawl space should be dry,
- Have a reasonable future utility,
- House need to be free of dry rot, fungus, and termites,
- Have proper roofing and
- Lead-based paint should be repaired.
5. Application Processing and Start VA Appraisal
After dealing with the house, you must finish a signed purchase contract. The lender will be waiting, and they’ll order the VA appraisal once you submit it. VA appraisal should be done by somebody qualified by the US Department of Veterans Affairs. The estimation may take ten business days from the order time and might be longer.
If you pick a property in a rural areas, the time to appraise your house may be longer than the informed period. How so? Because it requires the appraiser to travel a long distance, or there may be a need for more VA-qualified appraisers in your area.
6. Loan Closing and Move In
The last step is closing the VA loan after the underwriter approves it. You need to close on your loan and start moving in. But beforehand, you may need to pay closing costs and remember to provide proof of homeowners insurance. After ensuring those steps have been done, you can sign all the closing documents and get the keys.
Now You Know How to Use My VA Loan to Buy A House!
In short, VA loans can be gained by qualified US veterans, active service members, and numerous surviving spouses, as written in the 1994 GI Bill of Rights. To use the VA loan, the eligible ones should undergo some required steps, from picking a VA-approved lender to moving in after signing a loan closing necessary documents.
Indeed, VA loans are easy to obtain as long as you’re one of the veterans or service members. However, be sure you’ll pick a suitable lender approved by the VA, get a Certificate Of Eligibility before borrowing, and start house hunting. These steps will help you to get the most benefits provided by the VA.
After finishing those steps, don’t forget to sign the purchase contract so the VA appraisal can be done as fast as possible. Only then can you close the loan and start enjoying your new residence.
