VA Mortgage 101

For those who have served in the military, a VA mortgage is an important option to consider. With a VA loan, buyers are usually permitted to provide a much smaller down payment. With a traditional mortgage, the down payment is usually 20% of the sale price. Service members who qualify for a VA loan can expect to pay less than five percent with some loans requiring no down payment at all. So, to make the VA mortgage process a little easier, here are the steps former and active military personnel should take to get a loan.

  1. Shop around for a VA approved mortgage lender

Just as with a regular mortgage, it can be a good thing to know which brokers and lenders are able to provide the sort of loan you want. This is an easy process, as brokers will tell you either in person, over the phone, or online if they provide VA mortgages. You should also decide between an Adjustable Rate Mortgage and a Fixed Rate mortgage.

2. Get a Certificate of Eligibility

In order to get a VA loan you’ll need to have a COE. The certificate can be obtained through the ebenefits portal at VA.gov. You’ll likely need to provide proof of service and other documents, such as a marriage certificate if you are a qualified spouse, widow, or widower. This step is critical. Without a valid certificate of eligibility, you cannot qualify for a VA loan. It may be worth it to get your COE first.

3. Get a preapproval

VA loans require a smaller down payment than traditional mortgages but you will still need the same supporting documents in order to get a preapproval. You’ll need W2’s, tax returns, pay stubs, residential history, proof of funds for the down payment and bank statements. Because of the small down payment your loan amount is likely to be smaller than traditional mortgages but interest rates on VA loans are low right now too. Nationwide they are currently hovering around 2.9%.

4. Find a home

This is the same as it would be for a homebuyer with a traditional mortgage. Once you have a preapproval, you should get down to business house hunting. Those preapprovals are only good for a number of weeks.The bank will want to get any home you intend on buying appraised. You may have to hire a third party. Once that is done,with your agent’s help, you’ll know how much to offer and how much your loan is going to be. Then, close the deal.

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A boutique real estate agency where we strive to build lasting connections with our customers and with the community. We’re proud to call Western New York home.