How VA Loans Came to Be
In 1944 VA Loans were created as part of the original Servicemen’s Readjustment Act which is also known as the GI Bill of Rights. This guaranteed that veterans would be able to purchase a home without a down payment and was created for the sole purpose of providing financial assistance and adequate housing for veterans and their families.
Basic VA Loan Requirements
There are certain things that a person is required to have before they can be approved for a VA loan. Here are some of the basic requirements that you need before you can acquire a VA Loan.
Social security number, this personal information is always good to have regardless of the situation and is one of the most pertinent information a person can possess.
Proof of previous residences for the past 2 years as well as addresses and names of your employers that you have had over the past 2 years.
Individuals who are self-employed will be required to provide current income statements, balance sheets for their particular business and tax returns for the past 2 years.
Documentation of your current complete monthly salary.
Documentation of addresses, names balances and account numbers on all checking and savings accounts.
The estimated value of your furniture and other personal belongings.
A DD214 as well as Certification of Eligibility.
Current and valid check stubs along with W2’s for the past 2 years.
Documentation of loan information and addresses of other real estate that you may own.
You will be required to pay for appraisal of the property and for a credit report.
The reason that proof of past residence is a requirement of obtaining a VA Loan is fairly simple. They need to know that you have owned a home before to get an idea of your overall credit history as well as to check out the value of your previous homes.
The reason that they need to know about your previous employers is because they want to know you have a history of being steadily employed and may also want to use your former employers as references; this is also the reason that valid check stubs and W2’s for the past 2 years are required as well.
The reason you will be required to show proof of your tax returns, income statements and balance sheets for your current business is simple. They want to confirm that it does indeed exist and see how profitable a business it is and how well you have managed it.
They require proof of your gross monthly salary because they need to know just how much you make to better gage how large a loan you are capable of handling. The reason they also need your bank information is fairly self-explanatory in that it is the most feasible way to see your spending history and gage whether you are a responsible individual when it comes to money. They also need to be aware of all your assets.
The reason that the lender will need your DD214 or discharge papers is fairly simple as well. They need to see this document to affirm that you were indeed in the military and are indeed a veteran. They also require your Certificate of Eligibility so that they can make sure that you were indeed pre-approved by the VA.
The payment of closing costs is a definitive requirement as well as having the property appraised. Sometimes, however, the VA may allow for the seller to pay 6% of the overall closing costs.