For decades, veterans nationwide have taken advantage of the benefits offered through a VA loan. In most cases, VA loans save home buyers money in the long run. Whether it’s to avoid a down payment, refinance the entire value of a home or simply have an easier time qualifying for a mortgage, those who have served should consider taking advantage of this benefit they’ve earned.
One of the first steps in pursuing a VA loan is getting approved for a specific amount so you can begin house hunting (many lenders call this “preapproval”). How can VA loan preapproval give you the advantage when making an offer to buy a home?
We’ll go over this, but first, let’s discuss something unique to the VA loan approval process.
How Does VA Home Loan Approval Work?
When seeking a mortgage, it’s important for you and your lender to know you’re well-qualified financially, but there’s an extra step when it comes to VA loans.
To get a VA home loan, you need a valid Certificate of Eligibility (COE). This shows you’ve met the minimum service requirements to be eligible for a loan through the Department of Veterans Affairs. Briefly, these are the requirements:
- Served 181 days during peacetime (active duty)
- Served 90 days during war time (active duty)
- Served 6 years in the Reserves or National Guard or 90 days under Title 32 duty, at least 30 of which are continuous
- Survived a spouse who was killed in the line of duty
The VA website has more information on distinguishing between wartime and peacetime service. Service requirements are waived if you’re discharged as a result of a service-related disability.
To prove your service time and get your COE, you’ll need your discharge documents (DD 214). You can request these online if you don’t have a hard copy. If you have proof of service, Rocket MortgageⓇ can also work with you to obtain your COE.
The other piece of your mortgage approval is making sure you’re in good financial shape to take on a mortgage and present a strong offer to sellers and their agents. Preapproval has been a mortgage industry standard for a while, but the term means different things depending on who is doing the preapproval.
In a Prequalified Approval, we pull your credit to get a look at your median FICO® Score and any outstanding debts. We also ask for verbal or written estimates of income and any assets you want to use to qualify for the mortgage. From this, we’re able to get your debt-to-income ratio (DTI) to help you estimate the maximum loan amount you could afford.
The key here is that, because your income and assets aren’t verified, this is just an estimate. We strongly recommend that all our clients take the next step and get a Verified Approval.
In a Verified Approval, we’ll run a credit check and ask that you share documentation with us regarding your income and assets. Once these are submitted to our team, we’ll be able to give you a Verified Approval Letter to show the amount you can afford. Your offer is then as good as any made by a cash buyer. You and the sellers can be confident in your offer.
If, through no fault of your own, you don’t close after getting a Verified Approval, we’ll give you $1,000.1
FAQs About VA Loan Preapproval and Approval
How long does it take to get preapproved for a VA loan?
The circumstances of each loan are different, but it doesn’t take any longer to get approved for a VA loan than it would for a conventional or FHA loan. If you’re buying a home and your documentation is in order, we can get you a Verified Approval within 24 hours.
How long is the preapproval letter good for?
At Rocket Mortgage, all our Approval Letters are good for 90 days. Other lenders may have different policies.
The Bottom Line
If you’re an eligible veteran, servicemember or surviving spouse looking to buy a home soon, it’s essential to understand the requirements and processes for getting preapproval on your VA home loan.
Ready to get started? Apply online and let our mortgage experts help you through the process.
1 Participation in the Verified Approval program is based on an underwriter’s comprehensive analysis of your credit, income, employment status, debt, property, insurance, appraisal and a satisfactory title report/search. If new information materially changes the underwriting decision resulting in a denial of your credit request, if the loan fails to close for a reason outside of Quicken Loans’ control, or if you no longer want to proceed with the loan, your participation in the program will be discontinued. If your eligibility in the program does not change and your mortgage loan does not close, you will receive $1,000. This offer does not apply to new purchase loans submitted to Quicken Loans through a mortgage broker. This offer is not valid on jumbo loans or for self-employed clients. Quicken Loans reserves the right to cancel this offer at any time. Acceptance of this offer constitutes the acceptance of these terms and conditions, which are subject to change at the sole discretion of Quicken Loans. Additional conditions or exclusions may apply.
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