In the United States, Veterans are offered mortgage loans that are backed and guaranteed by the U.S. Department of Veteran Affairs. The Veteran home loan, or VA home loan, differs from normal loans because there is no down payment requirement, and no monthly private mortgage insurance (PMI) or monthly insurance premium (MIP) requirement.
But, before you go and look into these loans, you need to look into how to prequalify for a Veterans home loan. In 2016, a staggering 707,107 home loans were guaranteed by the VA nationwide, so there is a good chance you qualify. The process to prequalify for a Veteran loan is quite simple but requires one to obtain preapproval.
Here are some things to keep in mind when looking to get preapproved:
Check Your Credit
The most important thing that can be done is to check your credit report for errors. According to some financial advisors, 79% of credit reports contain at least one error. Even the smallest error can cost you a substantial amount of money, so keeping it in good shape can be incredibly beneficial.
Gather All Documents
Keep all the documents that you will need on hand for the lender. Lenders can differ on what they require to pass a preapproval, but the general rule is to have your last two W-2 statements and pay stubs for at least one month. DD Form 214, Certification of Release or Discharge From Active Duty are not necessary for the preapproval process but will help the lender get a head start on the steps that follow. Steps like ordering your Certificate of Eligibility from the VA. You can order your DD Form 214 from the National Archives website. The VA Certificate of Eligibility is evidence of your military service to qualify for Veteran home loan benefits.
Find A Lender
Find a lender that participates in the VA loan system, you can ask your real estate agent for referrals to several lenders if you don't have one. After you find one, make appointments to apply for the Veteran loan preapproval. Make sure to ask what documents will be needed, and make clear copies for them.
Fill out the application at the lender's office, and your preapproval results should be made within an hour or two after completing it. Time can vary depending on day, lender, and other circumstances.