
How to get preapproved for a VA loan
Accelerate your journey to homeownership by getting preapproved for your VA loan.
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With lower interest rates than conventional loans, no down payment and a little red tape, VA home loans can help veterans, military members and some military spouses purchase or update a home.
A VA loan is a type of mortgage that’s guaranteed by the United States Department of Veterans affairs. VA loans provide eligible US military service members, veterans and surviving spouses with a range of programs to help them purchase, build or repair a home.
The maximum conforming VA loan limit for one-unit properties in most counties was $647,200 in 2022 — up from $548,250 in 2021. VA lenders are able to offer borrowers more favorable finance terms, such as a competitive interest rate, comparable closing costs and the ability to refinance the funding fee. The loan itself is provided by qualified lenders such as banks and mortgage companies, and you still have to meet credit and income requirements to qualify.
All VA loans involve a feature called an entitlement. An entitlement is the dollar amount that the VA will guarantee to the lender in the event you default on your loan. While it varies by lender, many are willing to loan up to four times the amount of your entitlement.
VA loan programs include:
To be eligible for a VA loan, you must have sufficient credit and income and a valid COE. You must have served a minimum of 90 consecutive days during wartime, 181 consecutive days during peacetime, or six years in the National Guard or Reserves. The property you want to buy must be for your own personal occupancy.
VA mortgages are available for:
While the VA doesn’t set an official minimum credit score, most lenders who offer VA loans will. It varies by lender, but you’ll generally need a credit score of at least 620 to qualify.
Costs associated with a VA loan include:
For purchase loans, cash-out refinances and NADL programs, you can apply through the participating lender. For interest-rate reduction refinance loans, you don’t have to access a COE and can use the VA email confirmation process instead. Finally, for adapted housing grants, you can apply either through the VA website or by completing the application form and lodging it at your local Regional Loan Center.
To apply for a VA mortgage through a participating lender:
If you’d like to apply to get a VA loan, you’ll typically need proof of your veteran status and:
Compare VA mortgage lenders based on:
While VA loans are government-backed to protect lenders if you can’t repay your loan, conventional loans require borrowers to purchase private mortgage insurance (PMI) if the down payment is less than 20%. PMI can cost hundreds per month and offers you no protection. Instead, it protects the lender if you default on your loan.
Some other differences include:
Conventional | VA | |
---|---|---|
Interest Rates | Generally higher than for VA loans | Generally lower than for conventional loans |
Maximum loan amounts | $510,400 | Can vary by region, but for 2020, the limit is $510,400 in most counties |
Mortgage insurance | Private mortgage insurance (PMI) required if down payment is less than 20% | Not required |
Fees | No loan origination fee, but lender fees may apply | Requires upfront loan origination fee |
Down payment | Some programs offer 3% or lower down payment, but you’ll need PMI if less than 20% | None required |
Credit score | Most lenders look for a FICO score of at least 620 | FICO score of 620 or higher usually required |
Restricted uses | Can be used for primary and secondary residences, as well as investment properties | Must meet VA loan eligibility requirements and can only be used for a primary residence |
Learn more about conventional loans |
VA loans can help qualifying veterans, military service members and spouses get a home with a competitive interest rate and no down payment. But if you don’t qualify or if you need a loan with a higher limit, compare other mortgage types.
Can I use a VA loan to buy a duplex?
Yes. The only time a VA loan can be used to purchase rental property is for a duplex, triplex or fourplex/quadplex, as long as you will also be living on the property. Alternative housing types, such as houseboats and recreational vehicles, don’t qualify for a VA loan.
When can I be denied a VA mortgage loan?
There are a few reasons your VA loan could be denied: changing your employment in the middle of the application process, errors in your application and sudden changes with your credit.
How do I use a VA loan more than once?
Yes, a veteran’s entitlement can be restored once the veteran has disposed of the property and paid the loan in full. This will allow the veteran to use his or her VA home loan benefit again. Veterans who have lost a previous VA loan to foreclosure or bankruptcy may also be able to apply for another after a two-year waiting period.
How can I get extra cash at closing to make improvements on my home?
If the improvements make the home more energy-efficient, request an energy-efficient mortgage (EEM), which can allow you to finance up to an additional $6,000 on your mortgage. You also have the option of taking a cash-out refinance to take out additional funds for home improvements.
Accelerate your journey to homeownership by getting preapproved for your VA loan.
Read more…Discover your options and the potential risks of refinancing.
Read more…Which of these two government-backed loans is right for you?
Read more…Britny Lawhorn is a former publisher for Finder who specialized in mortgages. She helped readers get a better deal when they bought or refinanced a home. Prior to joining Finder, she spent over five years working in marketing agencies where she helped businesses grow their audience. She attended the University of Tennessee, where she earned a degree in English. In her free time, she enjoys traveling, volunteer work and dabbling in photography.
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