VA Loan Buyer’s Guide

Susan Kelly

Jun 13, 2023

Are you a veteran looking to purchase your first home? Then a VA loan might be exactly what you need. As an exclusive benefit to veterans and military members, VA loans offer special opportunities for those who've served our country.

In this blog post, we'll dig into the details of applying for and using a VA loan—from how they work to where to find them.

This comprehensive guide will provide all the information you need to make your journey from homebuyer to homeowner smoother than ever before.

Overview of VA Loan Benefits

A VA Loan Buyer’s Guide can provide an overview of the benefits of taking out a VA loan. As a homebuyer, it is important to know all the details when considering this type of financing to decide on the right loan for your needs.

Benefits of a VA loan include:

  • No down payment required: If you qualify for a VA loan, you don’t have to put money down. This is one of the largest benefits of using a VA Loan Buyer’s Guide to help you understand your options.
  • Lower interest rates: Because of the U.S. Department of Veteran's Affairs guarantees, VA loans often have lower interest rates than conventional loans.
  • No private mortgage insurance (PMI): Private mortgage insurance is typically required on mortgages with less than 20 percent down, but you don’t need PMI if you use a VA loan.
  • Flexible qualifying criteria: The VA doesn’t have the same strict credit and income requirements as other loan types, which makes it easier for veterans to qualify.

Guide to Eligibility Requirements

The Department of Veterans Affairs determines eligibility for a VA loan. To be eligible, you must have served in the military, either on active duty or reserving. You may also qualify if a family member has served in the military and has passed away due to service-related causes.

In addition to meeting the necessary service requirements, you must have a qualifying credit score and prove your income is sufficient for the loan. Generally, lenders prefer a score of 620 or higher and require proof of income when determining if you’re eligible to receive a VA loan.

Contact your local Veterans Affairs office or a VA-approved lender to determine if you qualify for a VA loan. They can help you determine eligibility and answer any questions you may have.

Understanding Down Payment and Closing Costs

One of the main benefits of a VA loan is that it requires very little or no money down. However, there are still some associated costs when closing on a home. These can include closing costs, prepaid items, and an optional VA funding fee.

Closing costs typically range from 2 to 5 percent of the loan amount and can include appraisal fees, title search and insurance, attorney’s fees, survey costs, taxes, and other expenses.

In addition to closing costs, you may need to pay a VA funding fee of up to 3.3 percent of the loan amount if it is a first-time use of your VA Loan Buyer's Guide benefit. This fee helps offset the VA loan program cost and can be financed into your loan amount.

If you have saved enough for a down payment, using these funds to cover some or all of your closing costs may be possible. You can negotiate with the seller to pay the closing costs depending on your circumstances.

To help you fully understand your costs, working with a knowledgeable loan officer who can estimate all fees and expenses associated with your loan is important. This will ensure you know the total home cost before deciding to move forward.

How to Prepare Your Financial Documentation

When applying for a VA loan, there are certain documents that you must have to be approved. This includes proof of income, credit score information, and financial history. To ensure that the entire process goes smoothly and quickly, it’s important to ensure your documentation is organized ahead of time.

  • Gather all necessary documents. You will need copies of your most recent pay stubs, W2 forms, tax returns (if applicable), and any other financial records you may have. Make sure to bring these with you when applying for a VA loan.
  • Review your credit score. A good credit score is necessary to be approved for a VA loan. Make sure to check your credit score and ensure it is within the range that lenders typically accept.
  • Provide proof of income. You must provide proof of your current income to be approved for a VA loan. This includes pay stubs, tax returns, or other proof of earning potential.
  • Gather other financial information. Make sure to have a list of any assets or debts you may have accrued and an estimate of your current expenses. This will help the lender get an accurate picture of your financial situation and make it easier for them to approve your loan application.

Strategies for Applying for a VA Loan

Once you have researched and decided that a VA loan is right for you, it’s time to begin the application process. Here are some tips that may help make the process smoother:

  • Ensure all your financial documents are gathered and in order before applying for a VA loan. This will make the process more efficient and help you receive a faster decision.
  • If you want to buy a home, get preapproved for the loan before shopping. This will provide more security as you shop for your dream home since you’ll know exactly how much of a loan is available.
  • Before applying, it is important to understand the VA loan requirements and ensure you meet them. For example, one of the prerequisites for a VA loan is that an applicant must have served at least 90 days during wartime or 181 days during peacetime.
  • When working with lenders, speak up if there’s anything in your credit report that may cause issues. Lenders may be able to help in certain cases, or they may point you in the direction of a VA-approved credit counselor.

Finally, working with experienced lenders familiar with the VA home loan process is important. This will help increase your chances of being approved and ensure you receive an efficient response.


What is the loan to value on a VA loan?

The lender determines the loan-to-value (LTV) ratio for VA loans, which may vary depending on your credit score, debt-to-income ratio, and other factors. Generally, LTV ratios up to 100% are allowable with a VA loan if the veteran's entitlement is sufficient.

What is the interest rate on a VA loan?

The lender determines VA loan interest rates, which may vary based on your credit score, debt-to-income ratio, and other factors. Generally speaking, VA loans offer competitive interest rates that may be lower than traditional mortgages.

What are the closing costs associated with a VA loan?

Closing costs associated with a VA loan are typically 2-5% of the purchase price. These costs include appraisal fees, title insurance, and origination charges. However, some VA lenders allow these closing costs to be paid by the seller or rolled into the loan amount.


VA loans are a great option for those who qualify. With no down payment and lower closing costs, it's a more achievable mortgage loan for Veterans. With the right documentation, approved lenders, and communication with the VA Department, you can be on your way to a new home. For further resources and more detailed advice, check out our VA Loan Buyer's Guide on our website.