VA-eligible borrowers often ponder this VA loan FAQ: whose loan is it anyway? Does your VA loan come from the U.S. Department of Veterans Affairs or the lender? The simple answer is the lender originates and funds the loan while the VA guarantees it.
How does the VA guarantee work?
Once a borrower is approved for a VA loan, the lender can submit it to the Department for the VA guarantee. Generally, about 25% of each veteran’s loan is backed by the government. If the loan is less than $144,000, the backing can be more. The guarantee gives lenders added security to offer unique features such as easier qualifying, no down payments up to conforming limits and no monthly mortgage insurance premiums.
Who Can Provide VA Loans?
Only VA-approved lenders can originate and fund VA loans. The VA has strict guidelines for lenders. Not all banks and mortgage companies are approved to make VA loans. Approved lenders have to comply with VA guidelines for loan eligibility and qualifying.
How do I apply for a VA home loan?
The best way to apply for a VA home loan is to find an approved lender. First, the lender can help you find out if you are eligible for military home loan benefits. A Certificate of Eligibility, or COE, is needed to proceed. An approved lender can print this out for most borrowers within a few minutes using the VA’s online system. Once you have a COE you can begin the application process with the lender. This will include income and credit qualifying. The lender will quickly be able to tell how much loan you can afford. If you get pre-qualified, you can start house hunting.
Share Your VA Mortgage Story
If you have a VA mortgage story to tell, we’d love to hear it. Please comment below. For more information about your home loan benefits, contact an approved lender.