The U.S. Department of Veterans Affairs–the VA–offers government-backed mortgage loans from qualifying creditors to qualified veterans and their families. The VA loan program is comparable in structure to that of the Federal Housing Administration (FHA). However, a VA loan offers additional benefits. If you are a qualifying U.S. veteran and now hold a mortgage guaranteed by the FHA, converting to a VA loan can save you significantly more income.
Determine if you are eligible for a VA loan. To be eligible, you have to be on active duty, a veteran, in the reserves, or even in the National Guard. If you are a veteran, you have to have obtained an honorable discharge. The VA also needs a minimal service time, which fluctuates depending upon your branch and also the time where you served. Review that the VA’s general principles of eligibility to see whether you fulfill the service-time requirements. Surviving spouses may also be eligible if their husbands or wives were service members or veterans who died during or because of their military support, and that would otherwise meet with the eligibility requirements. The surviving spouse cannot have remarried, however.
Locate and organize your service documents. All applicants will need their original, signed Statement of Service. If you are on active duty, you’ll need extra proof of busy status. If you are a veteran, you’ll require a backup your DD Form 214. Don’t use your original documents. Make copies and use them.
Obtain and complete VA Form 26-1880, Request for Certificate of Eligibility (Form 26-1817 for surviving spouses). You may download the form from the VA website, or call the VA office toll-free in 888-244-6711 to request a form via email. Create a duplicate of the completed form for your own records, then mail the original and copies of your support documents to the address printed on the top of the form. If you qualify, the VA will mail you a Certificate of Qualification.
Whenever you have your Certificate of Qualification, protected refinancing through a private lender that participates in the VA loan program. Entire a new home loan program with the creditor and attach copies of your most recent pay stubs and your latest income tax return. Additionally, provide your photographic analysis, your Social Security number and your Certificate of Qualification. Your creditor will take care of the process for securing VA assurance for you.
Make your home available for evaluation, which your new lender will organize. Your creditor may cover the costs of this evaluation for you; make certain to inquire beforehand. An appraiser will tour and visit your home, then prepare an account for your creditor.
Attend the closing for your new VA loan in person. Double-check the terms of your new loan to be sure the creditor didn’t change the rate of interest or loan amount. Be prepared to pay for the closing costs at this time, as you cannot roll these costs into your loan.
Pay off your FHA loan immediately after your new lender disburses the funds for your new VA loan. This may take up to a week. You’ll need to do yourself and pay right to your initial creditor for your FHA loan. Once you get your statement showing your loan is paid in full, contact your local FHA office and provide a representative with a backup.