Are VA Loans Hard To Close? The Ins and Outs of the VA Loan Closing Process

Lingering myths and misconceptions about these loans and their performance in the market push some sellers to reject VA offers entirely.

That isnt just a disservice to the Veterans and military families whove earned this benefit through service to our country. Plenty of sellers and real estate agents are turning their backs on the best-qualified buyers on the market.

Getting a mortgage to purchase a home can be a tedious process, especially for first-time homebuyers. If you’re eligible for a VA loan, you may be wondering if VA loans are more difficult to close than conventional loans. There are some myths surrounding VA loans that claim they take longer to close and have higher fallout rates. However, with the right preparation and knowledge, you can streamline the VA loan process and close efficiently.

VA Loan Closing Timeline Overview

On average, it takes about 40-50 days to close a VA mortgage. This is similar to closing times for conventional and FHA loans. Here’s a look at the key steps in the VA loan timeline

Preapproval – Get preapproved for a VA loan 2-3 months before house hunting This confirms you meet basic eligibility criteria,
Property Search – Work with a real estate agent to find a home. Make sure the seller’s timeline aligns with yours.
VA Appraisal – The property must be appraised by a VA-approved appraiser within 10 days of application.
Repairs – If repairs are required, they must be completed before closing. Extensive repairs can delay closing.
Underwriting – Final loan approval depends on underwriting. More documentation could be requested, impacting closing.

While every home purchase is different, VA borrowers can expect to close within the standard 6-7 weeks if properly prepared.

Factors That Impact VA Loan Closing Time

There are a few key factors that can influence the time it takes to close a VA-backed mortgage:

1. Getting Prequalified and Organized

Get prequalified with a VA lender 2-3 months before starting your home search. This shows sellers you’re serious and ready to buy. Gather documents like tax returns, pay stubs, and bank statements so they’re ready for underwriting. This prevents delays.

2. VA Lender Expertise

Choose an experienced VA lender with streamlined underwriting and appraisal ordering. This expedites the process. Ask about delegated underwriting authority.

3. Property Condition

Make sure the home meets VA Minimum Property Requirements with no major repairs needed. This prevents appraisal delays. Consider new construction homes or renovated properties.

4. Managing Timelines

Align your timeline with the sellers’ timeline. Be flexible on closing dates. Ensure there’s enough time for repairs or negotiations if needed.

5. Loan Processing

Respond quickly to underwriter requests for added documents. Ask your lender for status updates to stay on top of the process.

Common Myths About VA Loan Closing Times

There are some common misconceptions about VA loans taking longer to close or having higher fallout rates. However, data disproves these myths:

Myth: VA loans fail more often – VA loans actually closed at a 74.3% rate compared to 74.1% overall.
Myth: VA loans take weeks longer to close – VA loans close just 2 days slower on average per Ellie Mae data.
Myth: VA appraisals delay closings – Most VA appraisals are done within 10 days, like other loans.

While minor delays are possible, it’s unlikely your VA loan will have extensive closing delays if you prepare properly.

Tips for a Smooth, Quick VA Loan Closing

Here are some tips for keeping your VA home loan on track for a swift closing:

Get fully pre-underwritten – This approves you upfront vs piecemeal underwriting.
Choose a VA expert lender – Ask about delegated underwriting and appraisal ordering.
Select a move-in ready home – This prevents repairs that could delay closing. Consider new builds.
Line up inspections early – Schedule termite, septic, well, etc. inspections asap to prevent delays.
Maintain contact with your lender – Ask for status updates and provide requested documents ASAP.
Be ready to close – Have funds lined up for closing costs and down payment if applicable.
Build in a buffer – Leave wiggle room in case minor delays occur with appraisal, repairs, etc.

With proper preparation and an experienced lender, VA borrowers can expect a closing timeline similar to conventional loans. Closing delays of more than 2-3 weeks are quite uncommon with today’s efficient VA loan process.

Does the Seller’s Property Impact the VA Loan Process?

For a smooth VA loan closing, it also helps if you select the right property as the buyer. Homes that don’t meet VA Minimum Property Requirements can lead to delays. Here are property considerations as a VA buyer:

Condition – Choose updated homes or new builds requiring fewer repairs.
Roof – Request sellers replace old roofs that may not pass VA guidelines.
Heating/Cooling – Ensure HVAC systems are updated and meet VA standards.
Water/Sewage – Septic and wells should be recently inspected with no issues.
Electrical – Look for updated electric with GFCI outlets. Aluminum wiring must be inspected.
Foundation – Have foundation inspected if cracks or water issues are visible.

Taking the home’s condition into account can prevent headaches and surprises during the VA appraisal.

How Can VA Sellers Expedite the Process?

As a home seller, there are a few things you can do to keep a VA loan moving efficiently:

Prepare the home – Make repairs ahead of inspections to pass VA guidelines. Consider a pre-listing inspection.
Provide disclosures – Furnish septic, roof, termite, lead paint disclosures for a smoother appraisal.
Line up inspections – Have septic, well, HVAC, and pest inspections ready to prevent delays.
Accommodate timelines – Be flexible on closing dates and possession to prevent contract issues.
Negotiate fairly – Don’t discourage VA buyers by refusing reasonable requests or price negotiation.

With preparation on both sides, VA purchases don’t have to take any longer than conventional home buying.

Leveraging a VA Specialist for a Streamlined Closing

As a buyer or seller, working with real estate and lending professionals experienced in VA loans can streamline the entire closing process. Here’s how VA specialists make a difference:

They understand VA guidelines – This allows for quick, compliant transactions and appraisals.
They anticipate VA delays – Specialists proactively avoid common snags and delays.
They have preferred providers – Appraisers, inspectors, etc. fast track the process.
They educate clients – Experts set expectations and keep clients updated on timelines.

Take advantage of a built-in support team by choosing VA-savvy agents and lenders when buying or selling. Their expertise really speeds up the closing process.

The Bottom Line

VA loans don’t have to be complicated or time-consuming if you know what to expect. Work with experienced pros, prepare your documents early, choose a move-in ready home, and maintain open communication. This allows you to get through the VA loan process efficiently with minimal headaches or delays.

With a streamlined closing, you can move into your new home right on schedule. Don’t be deterred by myths around VA loans. An experienced team and proper preparation is the key to closing your VA mortgage on time.

Cons of Selling to a VA Loan Buyer

The VA appraisal process is two-pronged and involves both the valuation and a broad assessment of certain property conditions, known as the Minimum Property Requirements, or MPRs. During normal times, VA appraisals typically come back in just under 10 days nationwide, although the wait may be longer in more remote parts of the country.

There are also a lot of myths and misunderstandings surrounding VA appraisals. For sellers, your home doesnt have to be in perfect condition to pass the appraisal. If the appraiser does flag property condition issues, buyers may be able to obtain an exemption from the VA. If an exemption isnt granted, then the seller isnt required to pay for the repair — its possible for the buyer to do so in order to keep the deal moving forward.

Some home sellers wont accept VA offers because they mistakenly believe theyll have to pay all of the buyers closing costs.

The VA does limit what closing costs Veterans can pay, which is a huge benefit for those whove served our country. But sellers are not required to pay any closing costs on behalf of a VA buyer, including non-allowable fees Veterans aren’t legally permitted to pay.

Who pays what in closing costs is always a matter of negotiation between buyers and sellers. There is no requirement that a seller pay a dime toward a VA buyers bottom line.

VA Loan Requirements For Sellers

Sellers should be aware of the following if selling to VA loan borrowers:

The property must pass the VA appraisal and meet Minimum Property Requirements
There are non-allowable fees a buyer may ask a seller to pay for
VA guidelines allow sellers to pay up to 4% of selling price in concessions
VA loans have a Funding Fee that buyers typically pay but could fall on the seller with negotiation

Lets take a closer look at some of the pros and cons of VA loans for sellers and why you should consider offers from VA buyers.

Are VA Loans Hard to Close?

FAQ

Why do sellers not like VA loans?

One of the primary reasons some sellers may hesitate to accept a VA loan is due to misconceptions about the program. Some sellers believe that VA loans involve more red tape, delays, or stricter inspection requirements compared to conventional loans. In reality, VA loans are not as cumbersome as they may seem.

Are VA loans harder to get approved?

It’s generally easier to receive a VA loan approval than a conventional mortgage because of the low credit score requirements for VA loans.

Can a VA loan be denied at closing?

Can a VA loan be denied at closing? Technically, yes. There’s going to be a re verification of employment and re verification of credit.

What will cause a VA loan to get disapproved?

Common Reasons VA Loans are Denied Income outside the qualification range. High debt-to-income ratio. Inconsistent employment history. Other factors outside your control (e.g., a private mortgage lender choosing to reduce or end participation in the VA loan program)

How much do VA Loan Closing Costs Cost?

The exact amount that you’ll pay in VA loan closing costs will vary based on the home you choose and the details of your loan. However, you should expect closing costs to be 3% – 6% of the total value of the loan. Can I roll closing costs into my VA loan?

Are VA loans hard to close?

One myth about VA loans is that they’re harder to close than other mortgage types. This could be scary for sellers who are worried about the sale falling through if the borrower can’t get funding. In reality, though, VA loans close at nearly the same rate as conventional loans — and at a slightly better rate than FHA mortgages.

Can you close a VA loan without cash?

However, that doesn’t mean you’ll be able to close without any cash in the bank. VA loan closing costs are definitely something you should be aware of as you navigate the home buying process.

Do all VA loan requirements for closing costs apply?

Not all VA loan requirements for closing costs apply to everyone. If you’re a veteran considering a VA loan, you might be exempt from paying the funding fee portion of closing costs if you are: