What is the VA Loan Process Like?

Everybody knows that the procurement of a loan is not easy, though it can be considerably less of a trying experience if you are a veteran and served in the U.S. military. Here is a rundown of what the VA Loan process entails.

Rundown of the VA Loan Process

Who Are VA Loans for?

VA Loans are provided for veterans who have seen live action and are planning on buying a new home. The United States Government guarantees a portion of the loan if the purchaser finds they are unable to complete the terms of the loan. This assistance from the government is called an entitlement.


Entitlements typically range from $36,000 dollars upwards to $60,000 dollars; though it depends on the exact amount of the loan given or approved.

Benefits of a VA Loan

One of the main benefits of the VA Loan process is that it allows for veterans to purchase a home without making a down payment and provides 100% financing with no need for Private Mortgage Insurance. Most loans are accompanied by fluctuating interest rates and sometimes the seller has to assume the closing costs while you as the buyer are required to pay a funding fee. The funding fee varies depending on whether or not the buyer has made a down payment and the amount of the down payment that was made. The funding fee is generally about 3% of the cost of the house.

Requirements of Procuring a VA Loan

You must be qualified to receive a VA Loan. You must also fill out a Certificate of Eligibility and then submit it to your local VA eligibility center accompanied by a copy of your DD214 as proof of military service. After the Certification of Eligibility is given the applicant can then comprise documentation of proof of employment such as copies of pay checks and stubs as well as bank statements and bring them to the lender. The lender can then pre-approve them for a VA Loan. This process much like the traditional type of loan will involve the same steps such as a thorough credit check.

When You Have Found the Home You Want

Once you have found the ideal home that you wish to buy, you will be required to sign a purchase agreement, and then an appraisal will be performed by a VA approved lending company. After the appraisal is finished, closing on the house can begin.

Additional Costs involved with the VA Loan Process

There are no upfront costs for applying to receive a VA Loan; the only notable initial costs are for the appraisal of the property. Most every VA loan as well as loan in general is subject to closing costs of some kind. You may be able to find one that is exempt of lender fees but there will always be closing costs. Although in some instances the VA will allow the seller to pay 6% of the concessions and closing costs of your overall purchase.

What to Expect when Applying for a VA Loan

The VA approved lender will analyze your overall credit history to determine whether not the loan should be approved. They will check the past 12 months of your credit history. If you do not have credit history it does not prevent you from qualifying provided that you can show proof of prompt payments on such things as your rent, phone bills, utilities, etc. as these things can be utilized for a good credit line. If you have filed for bankruptcy then a full explanation of why must be given and you have re-established good credit. 


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