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How To Get Prequalified For A Va Loan – In its purest form, a VA loan pre-approval is an actual conditional loan commitment issued by a VA loan company acting for the lender. Once you’re pre-approved for a VA loan, you can actually buy and close quickly as long as the property meets the lender’s criteria.
However, not all lenders will sign VA loan documents as well as pending or foreclosed properties. This extra important step requires a lot of work and may not result in a closed loan because there is no property yet. This is usually an unnecessary extra step. However, for VA borrowers with marginal credit, extra effort is recommended because the credit file has already been reviewed by the underwriter.
How To Get Prequalified For A Va Loan
Unlike pre-qualification, pre-approval is based on a full review of the borrower’s files by an actual VA loan underwriter, rather than relying on information typically discussed over the phone between the borrower and loan officer. Below, we’ll discuss the steps to getting pre-approved for a VA loan…not just pre-qualifying for a VA loan.
Va Home Loan
Watch this short video for a quick overview of the differences between VA loan pre-approval and VA loan pre-qualification:
When veterans are pre-qualified for a Veterans Administration home loan, they are given an estimate of the size of the loan they will be able to obtain. These estimates are based on basic information provided by the expert, usually from a very brief conversation with the loan officer. No credit check is required for this conversation. Clear verification of credit profile and credit score is always recommended, especially for government loans like VA loans.
VA loan pre-qualification is a limited first step that can sometimes occur before actual VA loan pre-approval in the home buying process. You can simply understand your purchasing power and start buying a home. However, it often takes extra steps to establish a relationship with a reputable lender, who will then issue a strong letter certifying your eligibility as a VA buyer.
If you’re wondering how to get pre-approved for a VA home loan, we’re here to provide six quick and easy steps:
Home Loan Prequalification
Although many industry participants and lenders use the terms “pre-approval” and “pre-qualification” interchangeably, there are some very important differences to keep in mind.
VA loan prequalification is typically completed by a loan officer, an activity that may or may not include a credit check—an important part of the approval process. Debt-to-income ratios can be calculated during this campaign, but confidence cannot be applied to high debt ratio situations without using industry standards for auto insurance.
There is no alternative to this step. The lender’s staff must obtain a triple consolidated credit report and resulting credit score from all three credit bureaus. Unfortunately, the AUS or automated underwriting system can be operated by any employee of the lender, but the completeness and validity of the automated underwriting analysis results must be verified by a VA underwriter. The most commonly used AUS software is called Desktop Underwriter.
Inexperienced players can make many mistakes along the way, but these fatal mistakes will be caught by insurers – which they do! If the error is really serious, the loan will be rejected. If you bought through escrow, now is not the time to find out you don’t qualify!
Get A Mortgage Pre Approval
Most VA loan pre-approvals are delivered to borrowers themselves using AUS software, mostly without supervision. New users of the tool can learn how to operate the software in just a few hours and reach a level of proficiency in a few weeks.
Warning… As an anonymous VA borrower you cannot know if the user has a fatal error. Anyone can enter data into the software! All loans are different. “Civilian wages” can be simple, but some can be very complicated, such as some self-employment tax returns. Consequently, income error, debt distribution, residual income, etc. Can easily be part of pre-approval.
It’s a classic “garbage in, garbage out” scenario, and the results are only as good as the software developer’s experience. If an inexperienced loan officer makes a mistake and issues you a VA loan pre-approval letter, it may not be credible, which could lead you to unfortunate problems.
The chart below will detail the differences between pre-qualification and pre-approval, answering some frequently asked questions about the VA home loan process:
Va Loan Preapproval & Va Loan Prequalification
At SoCal VA Homes, we are committed to supporting you through the VA pre-qualification loan process, pending pre-approval if necessary. We do our best to qualify you properly and make your offer attractive! We simplify the process and deliver better results through unique and powerful programs.
We have several calculators to help you get pre-approved for a VA home loan. Our VA mortgage calculator can help you estimate your payment. Another of our calculators works like a VA home loan pre-qualification calculator because it breaks down all of your finances and shows you your loan ratio.
Veteran VA loan professionals are at your service, including Peter Van Brady, who wrote the essential book on VA loans: Most homebuyers have heard that if they’re looking for a mortgage, they need to get a mortgage or pre-approved. Buy a property. These are two important steps in the mortgage loan application process.
Some people use these terms interchangeably, but there are important differences that every home buyer should understand. Pre-qualification is only the first step. This can give you an idea of how much loan you may qualify for. Pre-approval is the second step and conditional commitment that actually gets you a mortgage.
Approval In Principle: Why It’s Your First Step For A Home Loan/mortgage
“The pre-qualification process is based on data submitted by the consumer,” says Todd Kaderbeck, residential broker associate at Beverly-Hanks Realtors in downtown Asheville, North Carolina. “Pre-approval is verified consumer data, such as a credit check.”
Getting pre-qualified involves providing a bank or lender with your full financial picture, including debt, income and assets. The lender will review everything and estimate the amount that the borrower can get. Pre-qualification can be done by phone or online and there is usually no fee.
Pre-qualification is fast and usually takes one to three days to receive a pre-qualification letter. Note that loan pre-qualification does not include a credit report analysis or an in-depth understanding of a borrower’s ability to afford a home.
The initial pre-qualification step allows discussion of any mortgage goals or needs you may have. The lender will explain the different mortgages and recommend the best type for you.
Real & Fake Pre Approval Letters (for Mortgage / Loan)
Mortgage discrimination is illegal. If you believe you are being discriminated against because of your race, religion, gender, marital status, use of public assistance, national origin, disability, or age, there are steps you can take. One step is to file a report with the Consumer Financial Protection Bureau or the US Department of Housing and Urban Development (HUD).
Similarly, the amount of pre-qualification is not fixed as it is based only on the information provided. This is only the amount that a borrower can expect to receive. A pre-qualified buyer does not carry the same weight as a pre-approved buyer who has undergone a more thorough investigation.
However, pre-qualification can be helpful during bidding. “Almost all offers in our market require a pre-qualification letter,” Kaderbeck said. “Sellers are smart and don’t want to sign a contract with a buyer who can’t fulfill the contract. This is one of the first questions we ask potential buyers: Have you met with the lender and confirmed your down payment? Qualifying status If not Either, we will advise the lender of the alternative. If so, we will request and retain a copy of the pre-qualification letter.”
The next step is getting pre-approved, and it’s much more involved. “Pre-qualification is a good indication of creditworthiness and loan-ability, but pre-qualification is the final decision,” Kaderbeck said.
Your Manufactured Home & Chattel Loan Lender
Borrowers must complete a formal mortgage application to be pre-approved and provide all required documents to the lender to conduct a comprehensive credit and financial background check. The lender will then provide pre-approval up to the specified amount.
Going through the pre-approval process gives you a better idea of the interest rate you will pay. Some lenders allow borrowers to lock in a rate or charge a pre-approval application fee that can add up to hundreds of dollars.
The lender will provide a conditional commitment in writing to the exact loan amount, allowing the borrower to find the home at or below that price level. This gives borrowers an advantage when dealing with sellers because they are one step closer to getting an actual mortgage.
The advantage of completing both the pre-qualification and pre-approval steps before looking for a home is that it gives the borrower an idea of how much the borrower will have to spend. It prevents wastage of time
Pre Qualified Vs. Pre Approved: What’s The Difference?
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