How Do Veterans Get Home Financing?

Homebuyers who are current or previous military personnel have access to a VA loan if they were not dishonorably discharged from the military. Each service member or veteran must follow careful guidelines when applying for a VA mortgage. Reviewing how veterans and current service member’s get home financing prepares them for the road ahead.

Establishing Eligibility for A VA Loan

Veterans or active duty personnel can qualify for a VA loan if they served 90 consecutive days of active wartime service and 181 days of active peacetime duty. If the individual served in the National Guard or Reserves, the individual would have served for at least six years to qualify. A surviving spouse of military personnel can qualify if their military member died in the line of duty. If the service member or veteran doesn’t have their certificate of entitlement, they can complete VA Form 26-1880 to get the certificate from their local Veteran Affairs.

Credit Scores for a VA Loan

The service member or veteran must have a credit score of at least 660 to qualify for the VA loan. Lenders complete a credit assessment to evaluate the applicant’s credit scores on all three credit histories. If the service member or veteran doesn’t have the qualifying credit score, some lenders won’t provide the VA loan. However, some lenders might give approval for the VA loan if the borrower provides a down payment of at least 20%. However, some lenders might require 30% if the credit score is less than 660.

How Long Does It take to Get Approval

Most lenders take between 30 to 45 days to approve the VA mortgage. The lender must verify all information presented by the applicant including their current employment if they aren’t still in the military. Verification forms are sent to the applicant’s employer or to Veteran’s Affairs if the service member is receiving military disability payments. Their income-to-debt ratio is evaluated to determine if the borrower can afford the loan. The mortgage lender must also conduct a flood report for the property and establish if it is in a designated flood zone.

Approval for the Property

When applying for a VA loan, the property of interest must be inspected according to the guidelines of Veteran’s Affairs. The property cannot have any structural damage or any building code violations. The inspection is more stringent than a traditional home inspection. If the property doesn’t pass the inspection, the buyer must find a different property or try a different mortgage program to get financing. For this reason, some veterans and service members get a preapproval for the mortgage and start searching for homes according to their buying budget. Reviewing the property inspections guidelines helps the borrower find the right property.

Homebuyers who want to use their eligibility for a VA loan to buy a home must provide evidence of entitlement. The borrower must also have a credit score of at least 660 to qualify. For homebuyers who have questions about using a VA loan, Dustin Dimisa can help them today.