VA Loan Rules: Getting Started With Your VA Home Loan
If you are new to the VA home loan program, you are probably wondering about the VA loan rules, and what it takes to get started with your VA loan benefit. One of the most important things to remember about getting ready for a VA loan is to give yourself at least 12 months in advance of the loan application before you actually apply.
But as you get closer to the day when you start your house hunting and the search for a lender, what should you know about the VA loan rules and the process? One important step is to establish your eligibility for the VA loan.
When you apply for your VA Certificate of Eligibility or COE, you are doing just that. The COE tells the lender everything the VA currently has on file regarding your status–whether you are exempt from paying the VA loan fee, how much entitlement you have, and other information. The COE is a very important document–VA loan rules discuss it specifically in its instructions to the lender.
Those instructions, found in VA Pamphlet 26-7, Chapter Two, tell the lender the following:
“Before processing and closing a loan for an applicant, the lender must ensure the applicant is an eligible veteran. Lenders should never close a loan before they establish eligibility, since VA cannot guarantee a loan for an ineligible veteran.”
The Certificate of Eligibility is the way your lender will have proof of your ability to apply for a VA home loan. According to Chapter Two, “A Certificate of Eligibility (COE) is the only reliable Proof of Eligibility for the lender (except in the case of an Interest Rate Reduction Refinancing Loan.) Once a COE is received, there is generally no need to have it updated before loan closing, unless the lender has reason to believe it is inaccurate.”
Borrowers can wait until they have selected a lender to get their COE if they so choose–the lender can assist the borrower in getting the Certificate of Eligibility or the borrower can do it on his or her own time. Either way, the lender will require the COE before the loan application process can move forward. Unfortunately your military ID or copies of your orders are not sufficient to help you get started.
Once the COE is on file with the lender, you can begin the rest of the VA loan process with your loan officer.
Do you have questions about VA home loans? Ask us in the comments section.