by Christine Yaged
Several benefits exist for military service members and their families, not the least of which is the VA home loan program. Through the Department of Veterans Affairs, home loans are available to qualified borrowers through a special program. VA home loans are incredibly beneficial to prospective and current homeowners, as they come with a government guaranty that makes it easier to get approval for those who may not otherwise be eligible for a traditional home loan.
VA home loans are not offered directly through the Department of Veterans Affairs but instead, through a large network of lenders, including banks, credit unions, and mortgage companies. They offer favorable interest rates, low to no down payment requirements, and fixed, predictable repayment terms that make home ownership a reality for hundreds of thousands of military service members each year.
Borrowers also have access to special refinance programs through the VA which can help when the need for debt consolidation or other extenuating circumstances arise.
While there are inherent benefits in getting a VA home loan, certain circumstances of military life may mean getting one in a hurry is necessary. Most home purchase transactions take time, and that can be a problem if you are facing a situation that rushes your home-buying need. Fortunately, there are ways to expedite your VA home loan that make the process easier on you, your family, and your loan officer. Here’s what you need to know.
1. Have Your Documents in Order
The process for applying for a VA home loan is similar to other mortgage options. Borrowers submit an application to a lender, providing details about income, the purchase price of the home, and an authorization to check credit history and score. While this is standard practice, mortgage loan officers also require documentation to back up these claims.
Many prospective homeowners believe that simply submitting the application for a VA home loan is the first and last step; they are then unprepared for the barrage of follow up requests from their lender for documents needed to verify their information. This can significantly slow down the process of getting the closing table on your new home purchase.
To speed up the timeline from application submission to approval and closing, have the following documents available to send to your loan officer as soon as he or she asks for them:
- Your most recent pay stubs, typically the last two to three months are requested
- Two years of W2s
- Two years of 1099s
- Two years of tax returns, including any schedules or extra forms
- Disability award letter from the VA
- Social security benefits letter
- Pension details
- Retirement account statements
- Bank account statements, including checking, saving, money market, and certificate of deposit accounts
- Investment account statements
Each of these documents is used to determine your eligibility for a VA home loan. Mortgage lenders want to know that they are taking on an acceptable risk when approving you for a new loan. That involves a close evaluation of income, your assets, and your debts. Having these documents available and ready to send to your loan officer when asked is a crucial step in speeding up the approval process.
2. Certify Your VA Eligibility
Another crucial step in getting a VA home loan is providing your proof of eligibility. While your mortgage officer can often get a certified eligibility document in a short period, you can be proactive by retrieving this yourself. Known as the Certificate of Eligibility, or COE, your eligibility document can be requested from the online system through the Department of Veterans Affairs. Access is granted immediately, and you can simply keep the certificate on hand in case your lender requests a copy.
There are some circumstances that prevent eligible VA home loan applicants from receiving their COE instantly online. Instead, the request has to be processed by mail, and this can take several weeks. Before applying for your VA home loan, make sure you have access to your COE or make your request for a copy of it via mail.
3. Gather Proof of Special Circumstances
Many military members face special circumstances that require them to provide extra documentation to their mortgage loan officer. These situations range widely from one borrower to the next, but they may include a spouse’s change in employment or income, a recent divorce or marriage, or a change in military or pension pay. While these changes are relatively common, VA home loan lenders need to know that you still qualify for the loan as these shifts take place.
If you applied for a new VA home loan based on one set of circumstances but you know that things will change by the time you close on your home purchase, your loan officer is likely to ask for more paperwork. Have items such as a divorce decree, verification of income changes from an employer, or an updated pension or benefits letter to provide as soon as possible. The faster your loan officer has the documentation backing up the change, the better off you will be in getting a quick approval and closing.
4. Be Available to Your Loan Officer
Finally, one of the biggest issues prospective home buyers face in getting to the closing table quickly is the communication lag between the lender, the mortgage loan officer, and the borrower. When questions are asked, or documentation is requested, it is essential that you respond quickly. A delay in getting the information to your lender means a delay in processing, which can push back your closing date.
Additionally, loan officers are often working with multiple borrowers every day, meaning they may miss an email or phone call from you. If you do not hear back on a question you have or get confirmation that documents were received, be proactive in following up with your lender. The combination of your availability and responsiveness to your loan officer will make a world of difference.
Getting a VA home loan is a process, but it does not have to take an extended period of time to get from start to finish. Be prepared with your documentation ahead of time, and know your VA eligibility prior to submitting an application.
Always be ready to answer questions your mortgage office or lender has, and if things change, share those changes as soon as possible. These small steps lay the groundwork for an expedited closing on your new VA home loan.
About Author: Christine Yaged is a co-founding partner and Chief Product Officer of FinanceBuzz. Christine launches and scales brands. She is passionate about technology, digital marketing, and people.