Getting a VA Home Loan

Getting a VA Home Loan

When a person has served in the military and wants to buy a house, one of the first things they should do is look for a VA home loan. This loan enables the buyer to buy a house with no money down. They may not be required to pay mortgage insurance every month. There may be limits on closing costs paid by the buyer. An appraisal describing the value of a property can also be provided.

What time is required?

Answering this question with any precision can be difficult. The majority of VA loans can be closed within 45 days. This is common in the mortgage industry. There are several steps in the approval process, and getting pre-approved is one way to shorten your closing time. Pre-approval means that a person has met the lender’s basic requirements for a loan before starting the process. The schedule for the seller to move out of the house and the buyer to move into the house can affect closing time. The agreed upon moving date can also lengthen or shorten the process. The VA rating also plays a role. If the appraiser approves the loan based on the repairs needed, the closing date can be extended by weeks and sometimes even months. After an evaluation, the VA loan must go through the underwriting process. This is the last step. The need for more documentation or resolution of eligibility issues may result in an extension of the cut-off date.

How much income do I need to make to be approved?

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

How long do I have to be 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. This is proof that a person qualifies for a VA loan. This does not guarantee that an individual will be approved for credit. The length of time required for active duty is determined by when a person has been in the military. A person who served in the Persian Gulf War must have completed 24 months of continuous active duty or at least 90 days and received an other than dishonorable discharge. An individual will qualify if they served less than 90 days during that time but have a service-connected disability. To learn the specific work experience requirements for a VA loan, contact the Veterans Administration.

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