VA loans are home finance loans that are underwritten by the Department of Veteran's Affairs and issued to eligible veterans to help them own a home. While these loans come with many benefits, they can be fairly time consuming from contract to close because of the strict underwriting requirements that the VA has for issuing insurance on loans granted by private lenders. Knowing the time frame and steps required to process a VA loan is critical for buying a home.
The first step in the loan process is to complete the lender-approved application for a VA loan. On this application you will need to disclose facts such as income, debt and cash on hand. This application will authorize the lender to pull and review your credit history and will help you assess your financial capability in regard to a home purchase.
Once a loan officer has a completed loan file, income documents and a credit report, the application will be submitted to a VA underwriter for processing. Underwriters can take as long as 14 days to render a decision on underwriting a loan for individuals with a solid credit background. Those with credit problems can wait as long as 30 days for a decision.
Once the file has been processed, the appraisal for the property you wish to purchase will be ordered. The appraisal can take as long as 10 days to be returned to the lender. Should there be any issues with the appraisal, you have some options. You can choose to either walk away from the property purchase completely, ask the seller to reduce the price or pay the difference between the appraised value and the loan amount in cash at closing.
Once the appraisal is completed, the loan is returned to underwriting for final approval. At this point, a VA underwriter will review all aspects of the loan and issue the final loan documents for the closing appointment. Once employment and credit is re-verified, the process takes about two business days to issue the closing documents and send the final information to the title company for the buyer to sign off on the loan and property information.
Once the final paperwork reaches the title company, closing will be scheduled. The closing appointment will take one to three hours, depending on the requirements set forth by the lender. At the closing appointment, the buyer will sign off on all of the final documents required by the lender to record the deed to the property at the county clerk's office, which effectively transfers ownership of the property to the buyer. From the beginning of the loan process to the end, expect a minimum of 30 days and sometimes as many as 45 to 60 days.