How to Prequalify for a VA Loan

The VA Secured Home Loan Program has helped you acquire home loans for veterans for more than 70 years. The program has remained popular because it offers a number of benefits for military veterans and those on active duty. The application process for a VA home loan is slightly different than for a conventional mortgage, but applicants can speed up the process by pre-qualifying for a loan amount.

What is prequalification?

Prequalification is a process in which your loan qualification information is taken prior to purchasing a home, to determine if you meet the initial requirements for the lender and how much you can afford. Although it does not guarantee that you will get a home loan from a lender, it does mean that you are qualified and very likely to be approved for the mortgage.

Benefits of prequalification

Being prequalified for a home loan offers potential buyers a number of benefits, such as:

• The price range you can afford is determined – This feature can save time by allowing you to view only the houses within your price range.
• Being prequalified makes you a more desirable buyer – Sellers who have multiple offers often accept offers from buyers they know have already been approved.
• Eliminate uncertainty for buyers – Knowing that you are prequalified for a loan can ease the stress of finding and buying a home.
• Prequalification allows you to negotiate better terms – The certainty of being approved for a loan can allow you to negotiate small issues with confidence.
• Prequalification can help streamline the closing process: it reduces the likelihood of “surprises” that can delay the closing of the sale.

How to get prequalified for a VA loan

Applicants for a home loan through the VA program will be asked to provide a series of documents for prequalification:

• Please provide information about your military service: A Certificate of Eligibility is required to apply for a VA guaranteed home loan. This document can be purchased by filling in the corresponding form. However, you can start the prequalification process before receiving the Certificate. In many cases, the lender will help you request the required document.
• Credit Information: The lender may request permission to review your credit score. If there are any problems with your credit history, they may suggest that you resolve past debts or correct the information for pre-approval.
• Employment Information – The lender will ask you to show proof of your current and previous employment. Lenders generally prefer to see two years of consistent employment. However, gaps in your work history do not necessarily disqualify you for a loan.
• Bank statements or investment statements – The lender will also want to know about your financial health in regards to the amount of money you have saved and the investments you may have. This information would also include any real estate on which you own the deed.
• Divorce Documents and Spousal / Child Support – Lenders generally also want information about divorce decrees and any support payments you may be required to pay that may affect your ability to repay the loan.

Prequalifying for a VA home loan can be an asset that can help home buyers get the best home for their needs at an affordable price. Consider getting prequalified when you start looking for your new home.