How does a VA home loan work!

As far as the processing aspect is concerned, the difference is not much between a VA Home loan and other loans. In fact, the processing in a VA loan is done so fast, it does not even take a day; sometimes, it is over in a few hours!  If you do not have a certificate of eligibility, you can get one by applying for it. All you have to do is to complete a form, known as VA Form 26-1880 and then submit the same to one of the VA Eligibility centers. Along with the application, you should attach the latest ‘discharge or separation’ papers which will mention your active military duty.

What are the requirements?

After doing all these, you may select the house you want to buy and make out an agreement with the seller. You may then get an appraisal from the VA. Next, you pick up the lender you like and make out an application. That is all. It is time to close the deal and move into your new home. Whoever may be the lender, a bank or a financial institution or a private lender, they will try to gather as much information as possible about you, your credit history and employment. This they will do while the appraisal is getting ready. If the lender is authorized to carry out an automatic processing, he will lose no time in approving the okay credit loan, on receipt of the ‘VA or LAPP approval value determination.’

VA home loan

However, the lender will forward the application to the local VA;s office in case VA’s approval is necessary in the first place. The decision of the VA’s office will be conveyed to the lender later. With the availability of the remaining or ‘restored loan entitlement,’ you can buy additional home/s. In case you need further details, you may contact the local VA’s office and get the same. Senior members and veterans are the ones who are benefited most by this VA loan program. To be eligible to get a VA Home loan, the mere fact that you have served in military is not sufficient; you should have done well, while in service, and you should have come out with honor. If it is the other way out, you will not be eligible for this loan program.

The length of your military service is another thing considered for eligibility. To be precise, you should have put in at least 90 days of service, during war time and a minimum of 181 days during peace time. There are other categories like Members of Reservist, etc. for whom the eligibility criterion is different and are varied. It would, therefore, be advisable for you to go to VA’s web site and gather full details. VA’s office will issue a document called ‘Eligibility Certificate.’ This is like confirming the eligibility of the applicant for the loan.

In a VA loan, who is the lender? The lender will, usually, be a banker or a financial institution. The role of the VA is restricted to ‘guaranteeing’ the loan. The lender is satisfied because there is no threat of losing his money even in the event of default by the borrower. The lender will give the loan to you if you are in possession of the eligibility certificate. At the same time, he can refuse to give the loan even if you have an eligibility certificate. He has the final say in the matter. Finally, never assume that your being a veteran or possessing an eligibility certificate will enable you to automatically get a VA loan. It is far from true!