Are you a veteran or active-duty military personnel seeking a mortgage to buy your dream home? Good idea! VA Loans are the right mortgage program for you. With this no-money-down opportunity, low rates, no mortgage insurance, and other excellent perks, you can finally make that home purchase you’ve always wanted.
Understanding the basics of the VA mortgage process will give you a better idea of how a VA Loans work. The following are six essential tips to increase your chances of getting approved of a VA Loan Plano.
Check If You’re Already Eligible For A VA Loan
When applying for a VA loan, you need to have proof of eligibility. In most cases, you’ll already be on the VA’s online system. If not, you’ll need to acquire one by mail which can take weeks or months. It would be best to check if you’re already eligible for a VA loan beforehand to make sure you can already apply for a mortgage. However, your mortgage lender can instantly get a Certificate of Eligibility for you.
Score A Higher FICO Score And A Good Credit Report
Aim to improve your score to lock in lower interest rates. Also, make sure to scour your credit report for any mistake or errors and have them corrected before applying for a mortgage.
Ensure Your Debt-to-income Ratio Is Below 41%
Most mortgage lenders will require a DTI ratio of 41% or lower to qualify for a VA Loan. Check your current DTI ratio, and if it falls above 41%, it means you have a high Debt-To-Income Ratio. While you can still avail a VA loan with a high DTI, lowering it to 41% or below increases your chance of landing a VA Loan.
Good Read: Lower Your Debt-to-Income Ratio
Get A Loan Pre-approval
Getting pre-approved for a VA Loan allows you to have a better understanding of your purchasing power. A pre-approval lets you determine how much you can spend, thus giving sellers an impression that you’re a serious homebuyer who can afford the purchase price.
Be Ready With Your Financial Documents
The mortgage application process involves you providing a substantial amount of financial documents. Your lender will use this to evaluate your assets, verify your income and check if you’re eligible for the VA Loan. Some of the documents you will need to provide are your Social Security benefits letter, Military retirement account statement, Accompanying IRS schedules/forms, two years worth of W-2s, 1099s and IRS 1040s, and 30 days most recent pay stubs, to name a few.
Know What Types Of Income You Can Include In Your Va Loan Application.
The following are the types of income you can include when applying for a VA loan.
- Self-employed income
- W2 income
- Part-time income
- Second job income
- Seasonal income
- Overtime pays and bonuses
- LES income
- Child support
VA loans are an excellent mortgage option for veterans, active-duty military personnel or other military borrowers. To enjoy this powerful lending program, make sure to take note of the tips mentioned above an increase your chances of landing a VA loan.