After serving your country, you’re probably looking to start the next chapter. If that includes finding a place of your own, home-buying has its ups and downs. Still, veterans reap some great benefits, such as qualifying for VA home loans and skipping down payments.
Knowing how to get preapproved for a VA home loan is super helpful to set yourself on the right track for qualification. Keep reading to find out how a mortgage broker in Dallas, TX, like Champions Mortgage can help.
Is Mortgage Preapproval Necessary When Buying a Dallas Home?
Since mortgage preapproval isn’t mandatory, some homebuyers opt out of traditional lenders and dip into their savings or communicate with a broker. Even then, preapproval is smart.
The lender looks at your documents and criteria to determine how much of a loan you can afford, which is how they know how much they can lend as you shop for your dream home. Once sellers and agents see you have preapproval from a reputable lender, they’ll know you can back up your offer and take your bid seriously.
In short, knowing how to get preapproved for a VA home loan is the first step, but hurries up the formal and more official part of the mortgage process that comes after it.
The Steps to Preapproval for VA Home Loans
A prequalification for a VA home loan is essentially a written or verbal estimate of what you can borrow. With financial documents, the lender takes the reins and looks through your income and asset documentation. They also run credit checks to confirm a loan amount you might access.
What are the VA loan requirements? Start here:
Proving Your Eligibility for a VA Loan
Not all veterans receive preapproval. Everyone must satisfy certain criteria, depending on their service records. For instance, the U.S. Department of Veterans Affairs demands that applicants for preapproval must have:
- Served on active duty during peacetime for 181 days or wartime for 90 days
- Served for at least 24 consecutive months
- Put six years into the National Guard or Reserves
- Served under Title 32 Duty for at least 30 consecutive days and 90 days total
They also list a spouse who lost their life in the line of duty or due to a service-related injury.
Satisfying Financial Requirements for Preapproval
Let’s say you meet the above criteria. You’ll gain a Certificate of Eligibility (COE). From there, figuring out how to get preapproved for a VA home loan includes satisfying some specific financial requirements.
To start, you’ll need a good credit score (640 or higher). Good scores mean fewer restrictions with most VA loan lenders. You’ll also need to prove you can afford the following:
- Debt-to-Income Ratio (DTI): How much of your monthly income goes into monthly debts like car and credit card payments – under 41%? How much is left to repay your loan?
- VA funding fees: At 1.25% and 3.3%, you can pay these fees upfront or with your loan amount each time.
- Closing costs: The lender builds the closing cost into your mortgage payment (typically, 3% to 6% of the buying price).
Other Steps Before Preapproval
For your initial preapproval, the lender then requires:
- All the documents, including bank statements
- Pay stubs
- Social security card
The lender also looks over financial statements. Upon qualifying, you’ll receive an initial approval letter to prove you have a lender on your side. The letter shows the loan amount.
We’re the Champions of What We Do!
At Champions Mortgage, 96% of applicants close. Plus, we offer 100% customer satisfaction. To learn more about how to get preapproved for a VA home loan, call (281) 727-2500 and start browsing the VA loans in Dallas, TX!
