The Top 10 VA Mortgage Loan Questions, Answered

Getting a VA mortgage loan can be confusing, with all of the eligibility requirements, paperwork, and processes involved. As VA home loan experts, we get asked a lot of questions from Veterans and military families interested in utilizing their well-earned VA home loan benefits

In this article, we will answer the top 10 most frequently asked VA mortgage loan questions, to help you get a better understanding of how these loans work.

1. Am I eligible for a VA home loan?

The basic eligibility criteria for a VA mortgage loan are

• Served at least 90 consecutive days on active duty during wartime
• Served at least 181 consecutive days during peacetime
• Currently serving on active duty
• Spouse of a deceased Veteran who died in service or from a service-connected disability

There are a few other ways to establish eligibility, like having a service-connected disability or being recalled to active duty from the reserves.

The best way to confirm you qualify is to get a Certificate of Eligibility (COE) from the VA. This shows your basic entitlement and is required by lenders.

2. How many times can I use my VA home loan benefit?

This VA mortgage loan entitlement can be used more than once. Unlike programs that offer a one-time benefit, you can use VA loans to buy multiple homes over your lifetime.

You can also have multiple VA mortgages at the same time, like keeping your current VA loan while taking out another to purchase a new home. The main limitation is the maximum VA loan amount you qualify for based on your available entitlement.

3. Do I need a downpayment for a VA home loan?

The big advantage of VA loans is that they require no down payment in most cases. Borrowers can purchase with 100% financing.

While down payments are not required, they can help you get better mortgage rates. Putting just 5-10% down on a VA loan can make your offer more attractive to sellers too.

4. What credit score do I need for a VA mortgage?

There is no specific minimum credit score to get a VA loan. Rather, lenders look at your entire credit profile. Things like your payment history, balances, and inquiries factor in.

Most lenders prefer a minimum 620 FICO score. But it’s possible to qualify with scores in the 500s by offsetting it with strong income, job history, or a downpayment. Having great credit in the 700s can help you land the best VA mortgage rates.

5. Can the VA deny my mortgage application?

The Department of Veterans Affairs themselves do not approve or deny VA home loans. They simply guarantee a portion of the loan amount.

It is lenders like banks and mortgage companies that will approve or deny your actual VA mortgage application based on your credit, income, debts, and ability to repay the loan.

6. How do I get a VA mortgage preapproval?

Getting preapproved by a lender before house hunting is highly recommended. Preapproval provides a VA home loan estimate you can shop with, showing sellers you are qualified.

To get preapproved, you’ll need to provide information to a lender verifying your identity, income, assets, credit, eligibility, and debts. This allows them to analyze your finances and provide a preapproval letter.

7. What VA mortgage rates should I expect?

VA mortgage rates are very competitive, often beating out conventional loans. The average 30-year fixed VA rate currently sits around 5.5%. Rates vary daily and depend on your specific qualifications.

Borrowers with great credit scores, low debt-to-income ratios, and down payments generally see the lowest VA interest rates from lenders.

8. What are closing costs on a VA loan?

Closing costs on a VA mortgage typically total 2-5% of the loan amount. These include lender origination fees, appraisal fees, title fees, taxes, insurance, etc.

With a VA loan, the seller can pay all closing costs over the VA limit. This helps buyers purchase with $0 out-of-pocket. Just make sure these seller-paid closing costs are allowed per your purchase contract.

9. How long does VA loan approval take?

A typical VA mortgage approval takes 30-45 days from application to closing. It can be quicker with a streamlined or “fast-track” approval program that some lenders offer.

Processing times also depend on you quickly providing all required VA documentation. Any delays submitting paperwork will extend the approval timeline.

10. Do I have to occupy the home I buy with a VA loan?

Yes, VA loans require you to personally occupy the home as your primary residence within 60 days of closing. This prevents investors from misusing the program.

Active duty service members sometimes receive occupancy waivers allowing spouses or dependents to move in first while they are deployed or stationed elsewhere. Make sure your lender is aware of any situations where you may not immediately move into the home.