Preparation is the key for any chosen path. Regardless of the assignment, knowing what to expect and to be ready for it not only makes the process a smooth one but can help you more easily navigate through any obstacles that might arise. When getting ready to apply for your VA loan, there are things you can do ahead of time that will make sure your loan is approved and ready to close.
Review Your Credit Report
Reviewing your credit report is something that should be a part of your annual financial review. When evaluating your current financial condition as it relates to your future goals, making sure you have a clean credit profile should be part of your strategy. Having solid credit scores allows you to access credit when emergency funds are needed or it's time to get a new car.
There are several online sources that can provide you with a copy of your credit report for free but ask that you subscribe to their credit monitoring or fraud prevention services. Subscribing to either might be a fine idea but to get your credit report log onto www.annualcreditreport.com and get a free, no strings attached credit report. This website is sponsored by the three main credit bureaus: Equifax, TransUnion and Experian. Look at your report for mistakes and if you see something amiss, gather your documentation and contact the credit agency directly to get the erroneous information removed. Don’t try and fix a credit report in the middle of a VA loan application, do this beforehand.
Get Your Certificate of Eligibility
Before you get to the application stage, you should contact the Department of Veteran’s Affairs for a copy of your certificate of eligibility, or COE. This form, when provided to your VA lender, shows how much entitlement you have and your overall eligibility to obtain a VA home loan.
To get your certificate, log onto https://vip.vba.va.gov and complete the information online. If you haven’t created a profile on the VA site, you’ll need to do that first. Simply follow the directions and you can order your COE online.
If you haven’t ordered your COE before you’ve applied for a VA home loan, your VA lender can assist you and can order the certificate on your behalf.
Gather Your VA-Required Documentation
While you have choices regarding which VA lender to use, they all will ask for the very same initial documentation upon applying for a VA home loan.
To document your employment and income, a VA lender will review your two most recent filed federal income tax returns, your two most recent W2 forms, and your most recent pay check stubs covering 30 days. Your ultimate lender will use the income as shown on your paycheck stub and compare your monthly pay with your year-to-date earnings.
Your lender will also order copies of your last two filed federal returns directly from the IRS and compare them with the ones you provided the lender.
Even though VA loans require no money down there will also be closing costs that, unless the seller pays for them on your behalf, you’ll have to pay. A VA lender will verify if you have enough money to cover any closing costs by examining your most recent bank statements showing sufficient funds to close. Make sure you provide all pages of your statements, even if some of them are blank. If you don’t, and the lender sees there is a page out of sequence, you can bet they’ll ask you for it.
Knowing ahead of time what your VA lender will ultimately ask for will not only accelerate your loan approval but also give you time for other important tasks during your approval such as looking for a property, shopping for new furniture or just enjoying a nice, peaceful evening at home, knowing your VA loan application is in good hands.