For many military service members, veterans and certain military spouses, the US Department of Veterans Affairs guarantees mortgages under the VA loan program. This program, which involves zero down payment and several other benefits, is enormously helpful to many of those who have served our country – but it does come with qualification thresholds and the need for an application, and there are some cases where applications may be denied.
At Altius Mortgage and our partners at Mortgage Ogden, we’re proud to provide VA loans and excellent VA loan rates to a variety of clients, including first-time homebuyers this program is often ideal for. We’ll walk you through the basic requirements for qualifying for VA loan, plus areas that might prevent you from qualifying. While some of these are based around credit score and other firm requirements, there may be certain errors or other controllable variables that also play a role here. This two-part blog will begin by looking at certain errors you may have some control over, while part two will dig into issues with automated underwriting and how this area may impact your application.
The single leading cause of VA loan application rejection, and also the area you have most control over, is errors on the application itself. VA loan applications are just like any other mortgage application: They require precision and exact details in every area, and even minor mistakes can cause issues.
Underwriters who view these applications, whether manual or automated, are perfectionists. You must be clear about things like sources of income and family size, plus be detailed in all debt disclosure and related areas that will impact how a lender views your financial situation. Be sure you’re clear and precise on every single area of the application.
Once you’ve begun the loan application and approval process, you should do your best to avoid major employment changes if possible. Underwriters may view this suspiciously or be concerned about the reliability of your new income.
If such a change is unavoidable, speak to your loan officer in advance. There may be new documentation to verify or other steps you can take to make this a more presentable situation to the underwriter that does not ruin your chances at approval.
Another big area to try and keep consistent in the lead-up to a VA loan application is your credit. Avoid taking out new debt or undergoing major credit checks during the application process, as these may alter your credit and raise suspicion from underwriters. Keep your debt-to-income ratio good as well, avoiding major credit purchases during the application process.
For more on avoiding risks of a VA loan application being denied, or to learn about any of our mortgage loan services, speak to the staff at Altius Mortgage today.