How Long Does a VA Loan Take to Close?
You’re ready to buy a home and you’ve heard that Veterans Affairs (VA) loans are a great benefit. But how long does a VA loan take to close?
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How Long Does a VA Loan Take to Close?
The answer to this question depends on a few factors. The first is whether you are buying a pre-existing home or building a new home. If you are buying a pre-existing home, the loan process will take about 40-50 days. If you are building a new home, the loan process will take about 60-90 days. The second factor is whether you are using a VA-approved lender.
The VA loan process is simple, but it can take time. To get started, you’ll need to get a Certificate of Eligibility from the VA. This can be done online, and you’ll need your DD-214 form to do it. Once you have your certificate, you can start shopping for a home.
Once you’ve found a home, you’ll need to get an appraisal and have the home inspected. The appraisal will determine how much the home is worth, and the inspection will make sure that the home is in good condition. Once these steps are complete, you’ll be able to apply for a loan.
The loan process can take some time, so it’s important to be patient. Once everything is approved, you’ll be able to close on your loan and move into your new home.
The reality is that every VA loan is different, and there is no one answer to the question, “How long does a VA loan take to close?” Some loans close in as little as 30 days, while others can take 60 or even 90 days. Here’s a rundown of how the process works and some things you can do to make sure your loan closes as quickly as possible.
The first step in the VA loan process is to get pre-qualified for a loan. This will give you an idea of how much home you can afford and what interest rate you’ll be paying. Once you’ve found a home that you want to make an offer on, your next step is to get a Certificate of Eligibility (COE) from the VA. The COE proves that you are eligible for a VA loan and lists your entitlement amount.
Once you have your COE, it’s time to find a lender and apply for your loan. The lender will order a home appraisal to make sure the property is worth at least as much as the loan amount you’re requesting. If everything goes well, the lender will approve your loan and send it to the VA for final approval.
Once the VA has approved your loan, the lender will send you a Loan Estimate which outlines all of the costs associated with your loan. At this point, you’ll need to complete a Loan Application Disclosure and sign various other paperwork. Once all of this has been completed, the lender will order a title search on the property to make sure there are no liens or judgments against it.
Once everything has been cleared, it’s time to close on your loan! The closing is where you’ll sign all of the final paperwork and hand over any money that’s due at closing (i.e., your down payment). Once all of that is done, the keys are officially yours!
How to Speed Up the Process
A VA loan can take anywhere between 30 to 45 days to close. The reason for the wide range is because of the many steps involved in the process. There are a few things that you, as the borrower, can do to help speed up the process.
Get a Pre-Approval
The best way to speed up the process is to get a pre-approval from a lender. A pre-approval means that you have been through the underwriting process with a lender and they have given you a letter stating that you are approved for a loan up to a certain amount.
Thisletter will list any conditions that need to be met in order for the loan to be finalized, such as providing proof of income or employment. Once you have a pre-approval, you can start shopping for a home within your price range. This will help to expedite the process because the lender will already have most of your information on file.
Stay in Communication With Your Lender
One way to speed up the VA loan process is to maintain open communication with your lender. Your loan officer is your best resource and can provide you with updates on the status of your loan. If you have any questions, don’t hesitate to ask!
Another way to keep the process moving along is to respond quickly to any requests for information from your lender. The sooner they have everything they need, the sooner they can get your loan approved.
One more tip: if you’re selling your home at the same time that you’re buying a new one, make sure your real estate agent knows that you have a VA loan. That way, they can help schedule a smooth and timely closing for both transactions.
Understand the Loan Process
The entire loan process, from application to closing, can take anywhere from 30 to 60 days. A number of factors can influence the timeline, including the type of loan you’re applying for and the lender you’re using.
To get an idea of how long your particular loan might take, it helps to understand each step of the process:
1. Applying for a loan: This is when you complete a loan application and submit it to a lender. It usually takes one to three days for a lender to review your application and get back to you with a decision.
2. Getting pre-approved for a loan: Once you’ve applied for a loan, you can choose to get pre-approved by a lender. This means that the lender has looked at your financial information and is willing to give you a loan up to a certain amount. Getting pre-approved can speed up the overall process because it gives you an idea of how much money you have to work with. It also helps sellers take your offer more seriously.
3. Finding a home: Once you know how much money you have to spend, you can start looking for homes in your price range.
4. Making an offer: When you find a home that you want to buy, you’ll need to make an offer on the property. If the seller accepts your offer, Congrats! You’re now in escrow.
5. Going into escrow: Escrow is when both buyers and sellers agree on all the terms of the sale and deposit money with a neutral third party (the escrow company). This process can take anywhere from two weeks to two months depending on the state that you live in and the type of property you’re buying
6 . Appraisal: Before lenders will give you a loan, they will want to make sure that the home is worth the price that you’ve agreed to pay for it . An appraiser will come out and assess the value of the property . If everything goes well , this part of the process usually only takes a week or two .
7 . Loan approval : Once the appraisal is done , your lender will give their final approval for your loan . If everything looks good , this step usually only takes another day or two .
8 . Closing : Now all that’s left is signing on the dotted line ! Congratulations , you are now a homeowner !
What Can Delay a VA Loan?
The Veterans Affairs loan program is one of the few remaining no-money-down home loan options. But it’s not always a quick and easy process.
One of the most common delays in closing a VA loan is due to appraisal issues. The appraiser may identify issues with the property that need to be addressed before the loan can be approved. For example, the appraiser may note that the home needs significant repairs before it will meet minimum property requirements. In this case, the buyer would need to either negotiate with the seller to have the repairs made prior to closing or arrange to make the repairs themselves after closing.
Income and Employment Verification
One of the most important things a lender will verify during the VA loan process is your income and employment history. Lenders want to ensure that you have a steady source of income that will allow you to make your monthly mortgage payments. To verify your income, lenders will request copies of your most recent pay stubs, W-2 forms and tax returns. If you are self-employed, lenders will also request a copy of your profit and loss statement. In addition to verifying your income, lenders will also verify your employment history. They will want to see that you have been employed for at least two years in the same line of work.
The VA Funding Fee
The VA funding fee is a onetime fee charged to all VA buyers regardless of their military service history or whether they have used their home loan benefits before. The fee is equal to 2.3% of the total loan amount for first-time VA buyers, and 3.6% for subsequent VA buyers.
The funding fee can be paid in cash at closing, or it can be rolled into the loan amount and financed over the life of the loan.
For most military borrowers, the funding fee is well worth it because of the many advantages that come with a VA loan. But for some borrowers, depending on their financial circumstances, the funding fee could delay their homebuying plans.
If you are short on cash and need every last penny to close your deal, you may have to wait until you have saved enough money to cover the funding fee before you can apply for a VA loan.
Or, if you are already stretched thin financially and taking on a bigger mortgage payment would be a strain, you may want to consider delaying your home purchase until you’re in a better financial position to handle the added expense of the funding fee.
Either way, it’s important to factor in the cost of the funding fee when deciding whether or not to apply for a VA loan.