The home loan process can often seem confusing and complicated to first-time home borrowers who are unfamiliar with the procedures and who don't know what to expect. Generally speaking, there are five basic steps to the VA home loan process. These steps aren't always completed in this exact order; however, below we have listed out the process the often results in the best homebuying experience.
(1) Often the best place to start is with a VA Lender who can get you prequalified.
Prequalification is a quick step that offers a foundation for the rest of your journey. With prequalification, you are givien an estimate of your purchasing power, ensuring you aren't wasting your time with homes that may not be attainable.
(2) The next step is to become preapproved for your home loan.
This step is much more thorough than prequalification. Here the lender will take an in-depth look at your financial portfolio - including pay stubs, tax returns, employment history, bank statements, investments and real estate assets.
(3) Following prequalification and preapproval, of course, is choosing a realtor and finding a home that you want to purchase.
(4) Making an offer follows finding your home.
Once you decide on your home, it is best to make sure that a VA option clause is contained in the purchase and sales agreement. It is also recommended that the buyer check for an "escape" in the contract that will protect the buyer if they are not able to obtain the VA loan. Another reason, pre-qualification and preapproval from a VA Lender is suggested before the home search if possible.
Once you have made an offer and we receive your loan paperwork, your loan officer will use a copy of your DD-214 to obtain your Certificate of Eligibility.
(5) The last step is processing and closing.
This includes a VA appraisal of the home to check for any major problems with the house beyond cosmetic issues. Additionally, the lender will process all of the credit and income information obtained from the borrower and awaits the results of the home appraisal. Once the appraisal information has been received by the lender, all of the information will be considered and a decision will be made to approve or deny the buyer.Finally, once the VA loan has been approved by the lender, the "closing" process begins. The lender, title company, and an attorney will coordinate to complete the closing of the loan.