VA loans are mortgages made available to eligible veterans, active-duty service members, reservists, and certain surviving spouses. The VA does not lend money for the loan; instead, it guarantees a portion of the loan, allowing lenders to offer more favorable terms to borrowers.
VA loans are available for both purchase and refinance transactions. For purchases, VA loan financing can reach up to 100 percent of a home’s price, so eligible veterans can acquire a home with zero down payment.
VA loans also can finance up to 100 percent of a home’s value for refinances, plus up to two discount points. VA loans offer more flexible credit and income requirements than other loan types.
This loan program is administered by the Veterans Benefits Administration (VBA), a U.S. Department of Veterans Affairs division, which provides the necessary support and resources to ensure VA loan borrowers have a positive experience.
However, to fully understand how this mortgage works, we have to go through the application process, which is today’s topic in this article:
You Still Need Prequalification and Preapproval
If you’re looking to acquire a home through a VA loan, you’ll need a VA-approved lender and get prequalified for a loan estimate. This will give a ballpark of how much you can borrow based on income, credit, and other financial factors. Prequalification is a key first step, and getting preapproved for a VA loan is an even more powerful move.
Loan preapproval is also a key step in the home-buying process. Lenders will verify your income and financial information to understand your purchasing power. The result is receiving a preapproval letter. These letters show real estate agents and home sellers you’re a serious buyer with what it takes to get to closing.
- You Must Make an Offer. Your agent will help you put together an offer that includes the price you’re willing to pay for the property and any other important details like the date you hope to close on the home and any contingencies that need to be met for you to move forward with the purchase.
- You Will Go through Appraisal and Underwriting, Too. The VA will demand an appraisal of the property to ensure it meets its standards for fair market value and minimum property requirements. At approximately the same time, underwriters will review your income, financial, and related documents, and the appraisal. If everything looks good, they will issue you a “clear to close” so you can move on to your loan closing.
- You Still Have to Close the Deal. At your loan closing, you will sign various legal documents and paperwork. Once everything is squared away, the authorities will surrender the keys to your new home.
Find Assistance with Loans from Mortgage City
The above steps apply to veterans and non-veteran applicants for VA loans. However, there are several ways you can qualify if you’re not a veteran or the surviving spouse of one. You can qualify if you’ve:
- Completed six years in the Reserves or National Guard
- Been discharged from service due to a related disability, among others
Get the right quote for your VA loans in Michigan from Mortgage City today and move into a home with zero down and affordable rates! Call us at (248) 930-8709 today.
Mortgage City is licensed and serves multiple states, such as Michigan, Florida, New Hampshire, Ohio, Massachusetts, Texas, California, Indiana, and Colorado.
