How to Apply for a San Diego VA Loan
As a part of the GI Bill of Rights, United States Veterans have benefits including those for home loans. The Department of Veterans Affairs will insure mortgages for no money down, or 100% financing, and with no mortgage insurance. If you’re interested in using your VA benefits to get a mortgage for no money down in San Diego, California, keep reading for the steps you need to take in order to receive financing.
Find a VA-approved lender.
Having a preliminary meeting with a licensed San Diego VA loan originator – either over the phone or in person - will allow you to discuss your loan options given financial information you provide, as well as get comfortable with the loan process and of course, your loan officer.
Questions You May Be Asked
- What is your credit score?
- Have you had any collections?
- What is your income?
- Have you ever filed for bankruptcy?
Arrive prepared by knowing your credit score, which can be requested from the three major credit bureaus: TransUnion, Equifax, and Experian, once per year for free.
If you feel comfortable with your lender, inquire about getting pre-approved or pre-qualified.
Request your Certificate of Eligibility (COE).
Your Certificate of Eligibility or COE can be requested from the Department of Veterans Affairs official website. For a detailed walkthrough, visit our page on getting your COE.
Gather other paperwork needed for pre-approval.
Getting pre-approved for a VA loan can be helpful for the home shopping portion of your home buying journey; many San Diego realtors will not show homes without seeing a pre-approval or at minimum pre-qualification from a VA lender.
Arrive prepared with the following documents, which will ultimately be necessary for your official mortgage application:
- Military ID or state issued ID.
- Last two recent pay stubs.
- The last 2 years of your W-2s.
- Recent bank or other assets statements.
- Copy of DD-214.
Pre-Approval Versus Pre-Qualification
The difference between pre-approval and pre-qualification lies in timing and strength. Both are votes of confidence from a lender, championing your ability to carry a loan of a certain amount, but without a guarantee. Pre-approvals are based on official credit and income checks from a mortgage underwriter, and they therefore take more time to issue. Pre-qualifications are based only on information you provide to your loan officer. Because they don’t require an official check, pre-qualifications have shorter turnaround time.
Shop for homes.
Like we mentioned above, it’s important to shop for homes after you’ve been issued a pre-approval or pre-qualification from a California licensed and VA-approved lender. Not only will you please your realtor and have an idea of your loan amount and therefore home buying budget - you’ll give home sellers confidence that your offer is a solid one, making you a fierce competitor in the marketplace.
Apply for your mortgage.
Once you’ve found your new home, return to your San Diego VA Lender with the documents you gathered for pre-approval above, as well as:
- A copy of the home sale contract
- Front and back copies of your home escrow earnest money check.
- Proof of homeowners insurance.
- Name and number of your realtor.
The VA Funding Fee
Note that most Veterans do not need to pay a down payment on their VA mortgage, but in order to reduce the cost to taxpayers, the VA funding fee must be paid. It typically ranges from 2.15 to 2.4% of your total loan amount. You may be exempt from paying the funding fee if you have service-related disabilities or are the surviving spouse of a Veteran who passed from a service-related injury or disability.
The Good Faith Estimate
No more than three days after you’ve submitted your VA loan application, you should receive a good faith estimate, or GFE from your lender. The GFE will detail all the costs your loan processing is expected to incur. Remember that the GFE is an estimate of costs, although if you find that your estimates seem skewed or vastly differ from your final dues, do not shy away from seeking a second opinion!
At closing, you’ll need to pay closing costs, which were listed in your GFE and are often lower for VA mortgages. One option to consider is speaking with your realtor and arranging for the seller to pay your closing costs, but their concessions cannot exceed 4% of the loan. Beware also of lenders who attempt to charge brokerage or buyer-broker fees; commission fees are not allowed to be charged to Veteran homebuyers.
More information about your VA loan closing fees and the funding fee can be found on the VA’s official site. Closing turnaround time varies from lender to lender, but rarely exceeds 60 days.
How do I start?
Get pre-qualified online with a free rate quote today by visiting our pre-qualify page. A loan officer will be in touch with you shortly to go over your scenario and relay your options. Pure Mortgage is a VA-approved lender licensed in the state of California, but specialize in San Diego area Veteran loans.