The VA Guaranteed Home Loan Program has helped acquire home loans for veterans for over 70 years. The program has maintained its popularity, because it offers a number of benefits for military veterans and active duty service people. The process of applying for a VA home loan is slightly different than that of a conventional mortgage, but applicants can expedite the process by pre-qualifying for a loan amount.
What Is Pre-Qualification?
Pre-qualification is a process in which your loan qualification information is taken in advance of the purchase of a home, in order to determine if you meet 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 means that you are qualified and are highly likely to be approved for the mortgage.
Benefits of Pre-Qualification
Being pre-qualified for a home loan offers prospective buyers a number of benefits, such as:
- The price range you can afford is determined – This feature can save time by allowing you to only look at homes within your price range.
- Being pre-qualified makes you a more desirable buyer – Sellers who have multiple offers often accept the offers of buyers they know have already been approved.
- Removes uncertainty for buyers – Knowing you are pre-qualified for a loan can ease the stress of finding and buying a home.
- Pre-qualification allows you to negotiate better terms – The certainty of having approval for a loan can allow you to negotiate small issues with confidence.
- Pre-qualification can help to streamline the closing process – It reduces the likelihood of “surprises” that can delay the closing on the sale.
How To Get Pre-Qualified for A VA Loan
Applicants for a home loan through the VA program will be asked to provide a number of documents for pre-qualification:
- Provide information about your military service – A Certificate of Eligibility is required to apply for a VA guaranteed home loan. This document can be acquired by filling out the appropriate form. However, you can start the process of pre-qualification before you receive the Certificate. In many cases, the lender will help you to file for the required document.
- Credit information – The lending institution may ask permission to look at your credit score. If there any problems with your credit record, they may suggest that you resolve past debts or correct information, in order to receive pre-approval.
- Employment information – The lender will ask to see proof of your current employment and previous employment. Generally, lenders prefer to see two years of consistent employment. However, gaps in your employment record 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 regard to how much money you have saved and any investments you may hold. This information would also include any real estate on which you hold the deed.
- Divorce and spouse/child support documents – Lenders generally also want information on divorce decrees and any support payments you are required to pay that could affect your ability to repay the loan.
Pre-qualification for a VA home loan can be an advantage that can help homebuyers get the best house for their needs at a price that is affordable. Consider getting pre-qualified when you begin to hunt for your new home.