Veteran’s Affairs (VA) Loans
For the vast majority of military borrowers, VA loans represent the most powerful lending program on the market.
What is a VA Loan?
A VA loan is a $0-down mortgage option issued by private lenders and partially backed, or guaranteed, by the Department of Veterans Affairs (VA). Eligible borrowers can use a VA loan to purchase a property as their primary residence or refinance an existing mortgage.
How Does a VA Loan Work?
VA loans work a bit differently than conventional mortgages. The Department of Veterans Affairs (VA) does not make or originate loans, but backs a portion of each loan against default. This backing, or guarantee, is what gives private lenders the confidence to extend $0 down financing and advantageous rates and terms.
What does the VA Loan Process Look Like?
VA loans work fairly similar to most other mortgage options, but with a few caveats. A typical VA loan process works something like this:1. Get Prequalified
Our mortgage specialist can help you prequalify to get an estimate of how much house you can afford based on your income, credit, entitlement and other financial factors. Prequalification is a basic first step that paves the way for a much more powerful step – VA loan preapproval.2. Get Preapproved
Loan preapproval is a major step and puts you in the driver’s seat to spring into action when you find a home you love. Lenders will verify income and financial information to get a clear sense of your purchasing power. The end result is receiving a preapproval letter. These letters show real estate agents and home sellers you’re a strong and serious buyer who has what it takes to get to closing.3. Put in an Offer
When you and your agent find the perfect VA loan approved home, it’s time to craft an offer and negotiation a contract with the seller. It’s important to find a VA loan savvy agent you trust that also knows the ins and outs of VA loans.4. Go through the VA Appraisal and Underwriting
Once under contract, your lender will order a VA appraisal of the property. The VA appraisal is not a home inspection, but a VA requirement to ensure the property meets fair market value and the VA's minimum property requirements. Around the same time underwriters will evaluate your income, financial and related documents along with the appraisal once it’s finalized. If everything checks out, you’ll be issued a clear to close and move on to your loan closing.5. Closing
You’ll sign all kinds of legal documents and paperwork at your loan closing and get the keys to your new home.