Purchasing a new home is one of life’s most fulfilling accomplishments. It’s kind of the American dream. But, it’s also a major financial commitment and needs careful preparation and planning.
That’s the purpose of this guide. We’re going to carefully walk you through step-by-step on how to purchase the right home at the right price, with a mortgage you can live with.
What is a VA Loan?
You have a handful of options when choosing the right loan to buy a home. Loan types often differ based on their qualification requirements and the terms they offer, such as the loan’s length, interest rate, and minimum down payment amount.
A VA loan is backed by the government through the U.S. Department of Veterans Affairs. VA-approved lenders are insured by the government to cover risks if borrowers can’t pay back these loans.
Backed by the VA, lenders are able to offer VA loans with more flexible qualification requirements than conventional and FHA loans, including lower credit scores and competitive interest rates. It also allows for no down payment and no mortgage insurance. These features make VA loans a popular option among first-time homebuyers. They can also be used more than once.
VA benefits are meant to help servicemembers, veterans, and eligible surviving spouses finance the purchase of a home.
How to Get a VA Loan
To learn whether a VA loan is the best option for purchasing your home, connect with us. To get you started, we’ve outlined the steps and documentation needed to help you understand the process.
The Financing Process
Homebuyers often start by requesting a quote for their interest rate or beginning an application with a lender. By sharing basic information about your potential purchase, we’ll work with you to pull your credit report, get your VA Certificate of Eligibility (CoE), and discuss your finances. We’ll also assess the potential value of the house you’re interested in purchasing.
As we move through the process together we’ll arrange for an appraisal of the house to determine its value.
We’ll also discuss the terms you qualify for and your options, as well as request various documentation for the underwriting process to make sure the loan begins on a solid foundation.
We’re with you through each step, leading to closing where we’ll finalize your affordable loan when you’re ready to purchase.
VA Requirements to Meet
These are the common requirements often needed to qualify for a VA purchase loan. If you have questions about these requirements, we’re here to help.
- A Certificate of Eligibility (CoE), which is used to show you are eligible for VA benefits.
- Credit score requirements vary. In most cases a credit score of 580 or higher qualifies. This may shift lower or higher based on other factors.
- Through underwriting evaluation, you’ll need documentation of consistent income with a Debt-to-Income ratio at or below 60%. This ratio shows how much of your monthly income goes to paying debt.
- Along with income information you need to show proof of residual monthly income remaining after major debts and obligations are paid.
- That you’re able to pay the VA funding fee, which can be waived in certain circumstances.
- The house needs to be your primary residence, and it must meet the minimum property standards.
*A down payment is required if the borrower does not have full VA entitlement or when the loan amount exceeds the VA county limits. VA loans subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit guidelines, and property limits.
Fairway is not affiliated with any government agencies