As a servicemember or veteran, it’s important to have a lender that is an expert in the VA Loan process. The VA Loan process is different than a conventional loan and has different requirements—which is why the VA requires certification of lenders for them to be able to offer VA Loan services. Lucky for you, ADPI’s in-house lending team AmNet excels in offering VA Lending Services to our amazing service members, veterans, and their families!
To start the VA Loan process, you’ll need to obtain a preapproval. A preapproval is a letter given by the lender stating that you (as a buyer) qualify for the property that you’re trying to purchase This letter gives you a great advantage when making an offer on a home –as it helps show your commitment and purchasing power. Preapproval can also help you when searching for a home. Many real estate agents require a lender preapproval before showing homes to ensure that buyers are serious and looking to purchase.
Some documents that you may be asked for before a preapproval are:
* Driver’s license or military ID
* Statement of Service for AD
* Recent banks statements
* Recent pay stubs and W-2s for last 2 years
* Copy of DD214
Once your loan officer has all of your paperwork, they will determine if everything checks out. If income and credit are verified, the loan officer will be able to generate a preapproval letter. Once you have this letter in hand, it’s on to the next step – HOUSE HUNTING!
Not only is it important to have a lender that understands a VA Loan, but having a real estate agent that is familiar with VA Loans is imperative as well. With that knowledge, real estate agents will be able to form offers and contracts that will be advantageous to you as the buyer. VA Loan savvy agents will also be able to assist you in choosing a home that fits VA eligibility criteria.
With your preapproval letter from your lender, the next step is finding the right property! Having a preapproval letter in hand gives you an advantage with sellers. When searching for the perfect property, make sure that you stay within your budget. Keep in mind that it shouldn’t be your max amount—you don’t want to be “house poor” because too much of your pay is going toward your mortgage! Once you decide to make an offer on a property, have your lender alter the preapproval letter for the offer amount, not just your maximum loan amount.
Before submitting an offer, it’s important to rely on your loan officer and real estate agent to help determine the best offer amount. You’ll need to consider VA Loan closing costs so that there are no surprises at closing. Though these numbers can be anxiety-inducing, your real estate agent may suggest that the offer include the seller paying all or some of your closing costs. Luckily, the VA allows sellers to pay up to 4% of the purchase price toward closing costs in seller concessions. That can amount to thousands of dollars in savings for you!
Once you’re under contract, the work really starts for your loan officer. After the contract is executed (signed by all parties), the loan officer will send the contract to the underwriters for review. The underwriters and processors will help determine if your finances meet the criteria to purchase the home. Your lending team will also order an appraisal through the Department of Veteran’s Affairs. This appraisal will show whether the value of the property and the asking price are in sync. The appraiser may also require certain repairs before providing a property value. If the appraisal comes in at or above the asking price of the property, that's awesome news! You’ll then be able to move on to the next stage of underwriting. If the value comes in under the asking price, the parties will need to renegotiate the price (called a "Tidewater"), or walk away from the transaction.
During underwriting, buyers will be asked to provide numerous documents—and sometimes more than once. Buyers should be prepared to provide documents up to the day before (or even the day of) closing. They will be continuously reviewed to ensure that you are financially ready to purchase the property. That is why lenders and real estate agents will warn you not to make any big purchases until the transaction is closed and recorded.
After the appraisal, survey, and inspections are complete and satisfactory, all parties involved will be issued a “clear to close”. During this stage, the buyer will be given a closing disclosure that will compare final closing costs to the loan estimate given at the beginning of the process. In most cases, your loan officer will go over this with you. Don't be afraid to ask questions and get clarification on any issues!
As mentioned before, proof of employment and/or bank statements may be requested one last time before closing. You should let your lender know if anything changes with your accounts or employment situation. It is VERY important to keep things as financially stable and unchanged as possible.
Before closing, buyers should do a walkthrough of the property to ensure that all repairs have been completed and are satisfactory. That will also include that the property is swept clean and has had all items removed (that were not in the contract).
If everything looks great, it’s time to close! In most states, you’ll meet with an attorney or title company to complete closing. At closing, you’ll sign the loan documents and receive the keys to the property!
Whatever lending team you choose should have expertise in coordinating VA loans and understanding the military lifestyle. Luckily, ADPI’s in-house lending team can provide both! Owned and operated by military veterans, AmNet is fully committed to making your home purchase as smooth as possible. ADPI’s AmNet Branch is currently licensed in 25 states (and adding more soon!). To see if they are available in your state, please fill out this form. AmNet's team members can’t wait to earn your business!