Purchasing a home using VA loan benefits can be an extremely rewarding financial experience. This type of government-backed mortgage offers more flexibility and forgiving requirements than other types of loans. Some of the most notable benefits include a zero down payment and no need for mortgage insurance. It is possible to check out Veterans Community to learn more about these loans and to read the information below to find out what to do to secure this lending option.
Start the Process Without a COE
Some people believe they have to have all the paperwork in order before they can even begin the process to acquire a VA loan. There is actually no requirement to have the Certificate of Eligibility before starting the process for approval for a VA loan. Lenders typically get this for individuals during the preapproval process.
If someone feels better having it at the start, they can use the VA’s Benefits portal or contact a local VA office.
Conduct a Credit Check
Regardless of the type of mortgage someone is trying to acquire, VA or something else, it is important for a borrower to understand their credit report before trying to get the home loan. It is not necessary to have perfect credit to get a VA loan, but higher scores can help someone get a better rate and help them avoid major issues moving forward.
With a credit report, a person will not get to see their actual score; however, they will get free copies of the credit report, which can be helpful before applying for a loan. Approximately 25% of all credit reports have entries that are serious enough to result in credit being denied.
Know Acceptable Uses
The goal of the VA is to help veterans purchase or refinance a primary residence. That can be a single-family residence, new construction, condominium, manufactured home, or multi-unit properties. This is the case as long as the person is living in one of the units.
This is not a program to help people purchase a vacation home, working farm, investment property, or another type of property that will produce an income. However, it is possible to convert the main residence into a rental property after the buyer has lived in it for a while.
To help enhance the focus of the VA on primary residences, a VL loan will also come with occupancy requirements. If someone uses this loan product, they are expected to be living in the home, as the person’s primary residence within just 60 days of closing.
This can be challenging for deployed service members or military contractors who are working overseas. There are some exceptions to the occupancy requirement with the most common being that a spouse can fill it for the military member.
When it comes to VA loans, there are more than a few factors to consider. Keep the tips here in mind to know how to secure this loan product and give a person the best chance of success.