How to Get a VA Loan in 2023 • Benzinga
A VA home loan is a mortgage insured against default by the US Department of Veterans Affairs. The VA Loan Program is designed to help our most deserving citizens obtain home financing, at competitive interest rates, while requiring no deposit Or private mortgage insurance (PMI).
If you’re wondering what the VA loan requirements are or how to get a VA loan, follow Benzinga breaks down this important topic.
VA Loans: An Overview
VA home loans can be used for:
- To buy a house
- To build a home
- Buying and upgrading a house simultaneously
- Improve a home by installing energy-related features or making energy-saving upgrades
- Buy a prefabricated house and/or land
- To refinance an existing VA-secured or direct loan for a lower interest rate
- To refinance an existing mortgage or other lien-secured debt of a residence occupied by the veteran as a home
Your length of service or service commitment, service status, and nature of service determine your eligibility for specific home loan benefits (see applicable eligibility requirements). VA-backed loans are eligible for a home for your occupation or a spouse and/or dependent (for active duty members). To be eligible, you must have sufficient credit and income to meet scheduled monthly obligations, and a Certificate of Eligibility (COE).
- Veteran and current or former National Guard or Reserve member who has been activated on federal active duty – requires a copy of a Form DD 214 showing the character of the service and the narrative reason for the separation
- Member of active duty or current member of the National Guard or Reserve who has never been on federal active duty – A current service statement signed by (or by the direction of) the warrant officer, personnel office or commander of the unit or higher headquarters. Must include your full name, social security number, date of birth, date you entered active duty, duration of any lost time, and the name of the order providing the information.
- Discharged member of the National Guard who has never been activated for federal active duty – Form NGB 22, Separation Report and Record of Service, for each period of National Guard service -AND- Form NGB 23, Point Accounting retirement, and proof of character of service.
- Released member of the selected reserve who has never been activated for federal active duty – a copy of your last annual retirement points statement and proof of honorable service.
- Surviving spouse in receiving DIC (dependency and compensation) benefits – Submit VA Form 26-1817 and Veteran’s DD 214 (if available). Provide the veteran’s and surviving spouse’s Social Security number on Form 26-1817.
Surviving spouse not receiving DIC benefits – submit the following to the appropriate compensation and pension office; Form VA 21P-534-ARE, DD 214 (if available), Marriage License, Death Certificate or Form DD 1300 – Claims Report. Find your state’s mailing address to mail VA 21-534 to PMC States.
Request a Certificate of Eligibility
After gathering all the necessary documents, you can apply for a Certificate of Eligibility (COE) in several ways:
- Military, veterans, and members of the National Guard and Reserve
- Apply online with the eBenefit portal.
- Apply through your lender. Most lenders have access to the system, an internet application can establish eligibility and issue a COE. Not all cases can be treated this way, the VA must have enough data recorded.
- Apply by mail. Use Form VA 26-1817, Application for Certification of Eligibility.
- Surviving spouses
Take a VA Form 26-1817 to the lender for processing or send 26-1817 and DD 214 (if available) to the address listed.
Perhaps the biggest advantage of VA home financing is the ability to avoid mortgage insurance while not requiring any down payment at the same time. Indeed, loans can be granted up to 103.3% Loan to value (LTV) is the lessor’s selling price/appraised value divided by the loan amount expressed as a percentage), which means that borrowers can borrow more than 100% of the value of their home.
Although VA loans do not require VA mortgage insurance, they do have a financing costs 3.3% of the loan amount. The fee is financeable at the request of the borrower, which is intended to allow eligible veterans to borrow 3.3% more than the value of their home.
Disabled veterans are exempt from funding fees based on their percentage of disability. Keep in mind that for all mortgages there is closing costs to consider in addition to your down payment, such as origination fees, title fees, escrow deposits, etc. seller’s concessionsthese fees will be payable by the borrowers at the closing table.
Among the VA home loan requirements is that you can afford the monthly payment. Depending on today’s VA loan rates, your mortgage may vary. The best way to determine what yours will be is to use a VA home loan calculator.
- Income documentation: W2 and payslips (if hourly/salary), 2-year tax returns (if commission/self-employed)
- Asset documentation (detailed statements for savings, checking or investment accounts)
- Property sale contract
- DD214 or Guarantee Certificate
- Certificate of eligibility
Where to apply
The Department of Veterans Affairs does not issue VA loans, it simply writes the program guidelines. To get a VA mortgage, you will need to find an approved VA lender.
Smaller community or regional banks may also offer VA loans, so checking websites or making a phone call can determine if they offer a VA loan product. When talking to VA lenders, it’s best to have all the necessary documentation ready.
This will give you the fastest and most accurate measurement of your qualifications. If you can’t get the necessary documents ahead of time, don’t worry. Most loan officers should be able to point you in the right direction.
Frequently Asked Questions
1) Q: How do I get pre-approved?
First, you need to complete an application and submit it to the lender of your choice. For application, you need 2 previous years of tax returns including your W-2s, last month’s pay stub, 2 months of bank statements and the lender will run your credit report. Once the application is submitted and processed, it takes 2-7 days to be approved or declined. Discover our best lenders and lock your rate Today!
2) Q: How much interest will I pay?
The interest you will pay is based on the interest rate you received when the loan was granted, the amount you borrowed and the term of the loan. If you borrow $208,800 at 3.62%, over a 30-year loan, you will pay $133,793.14 in interest, assuming you make the monthly payment of $951.65. For a purchase mortgage rate get a quote here. If you’re looking to refinance, you can get started fast here.
3) Q: How much should I save for a deposit?
Most lenders will recommend that you save at least 20% of the cost of the home for a down payment. It is wise to save at least 20% because the more you bet, the lower your monthly payment will be and ultimately you will also save on interest charges. In case you can’t save 20%, there are several homebuyer assistance programs, especially for first-time buyers. Check specialist lenders to make the home buying experience a breeze.
Who are the best VA mortgage lenders?
Finding the best VA mortgage lenders is easy. Just go to the Benzinga website and check out the latest offers!