For military service members, veterans and often their spouses, the VA loan program is one of the most beneficial mortgage programs out there. Backed by the US Department of Veteran’s Affairs, these loans help reward members for their service to our country with limited or no down payments, no mortgage insurance requirements and fantastic interest rates for buyers.
At Primary Residential Mortgage, we’re proud to offer quality VA loans as one of many home loan programs we provide. While qualification for VA loans tends to be very easy compared with many other loan types, there are still a few areas that may cause your VA loan application to be denied by an underwriter. Here are some of these possible causes, plus how to ensure they do not impact your VA loan application.
Once the loan application process has begun, underwriters will be examining factors related to your employment and income. If you make a big change in employment during this period, the underwriter may consider your new income to be unreliable and may deny the loan based on limited income coming in.
If you’re aware in advance that a job change is on the horizon, we highly recommend speaking to your loan officer about this beforehand. We will help you arrange the proper documentation so your new job can be verified by an underwriter and you do not deal with denial issues based on a legitimate job change.
Credit is important during many loan applications, and VA loans are no exception. For this reason, we recommend staying away from making any big alterations to your credit, such as major purchases or taking out new cards or lines of credit. If possible, avoid any credit checks done by other agencies, as these may harm your score. If you are planning on making a major purchase, you should wait until after the loan has funded.
The single most common cause of VA loan applications being rejected: Errors made by the applicant. Double- and triple-check every detail of your application before submitting it – underwriters are perfectionists who require everything to be in order down to the letter. Be clear about everything from basic information to debt disclosure, sources of income and more.
Finally, today’s mortgage world may feature automated underwriting systems used by some lenders. This involves a basic online portal where applicants can upload information and their application, and a system determines who qualifies.
These systems, while valuable to many lenders and borrowers for convenience and timing reasons, may reject applications for certain other reasons. This may be based on inputs, incorrect credit reporting or previously unresolved credit issues, all of which may trigger automatic denial from the system.
For more on avoiding errors that might lead to denial of your VA loan application, or to learn about any of our home loan programs, speak to the staff at Primary Residential Mortgage today.
*PRMI NMLS 3094. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms, and conditions are subject to change and are subject to borrower(s) qualification. This is not a commitment to lend. Opinions expressed are solely my own and do not express the views of my employer.