Here we dive into the common document needs when applying for a VA loan. Keep in mind, having every document upfront isn't necessary to start the loan process, but helps keep things moving.
Missing documents and unsigned paperwork are two of the biggest reasons Veterans encounter delays in the VA loan process.
Whether it's a VA-backed mortgage, FHA-backed mortgage or a conventional mortgage, many people see their home loan applications denied or closing dates pushed back because of problems with their documents.
To take control of your homeownership destiny, start by ensuring all the required documents you need are ready and easily accessible.
The mortgage process involves a lot of paperwork, so problems do arise. To help prepare you for your mortgage qualification journey, let's look at the most common documents needs when applying for a VA loan.
The following is a summary of the documents typically required for a VA loan:
Identity verification is required when you formally apply for a VA mortgage. Prepare to send a copy or picture of your drivers license, state-issued ID or other government-issued ID. If you don't have access to a scanner, don't worry, photos of the ID are typically acceptable. Just make sure it's clear, easy to read and in color.
Veterans and service members need proof that they’re eligible for the home loan benefit. That proof comes in the form of what’s known as the Certificate of Eligibility, which is a formal document issued by the Department of Veterans Affairs.
You don't need this official VA paperwork to start the loan process. In fact, lenders will often be able to obtain this document for you once things are underway.
In some cases, you may need to provide additional documentation about your service history in order to secure the Certificate of Eligibility. Veterans discharged from service would need a DD-214, active-duty personnel must provide a Statement of Service - typically obtained from their commanding officer - and National Guard/Reservists would need their points statement.
But lenders can often get your COE with some basic information alone. Talk to your loan officer if you don't have your COE or if you need one to qualify.
You must verify all your income sources when you apply for a VA home loan, and you may need to provide a written or verbal verification of your employment. Here is a list of the most common income documents you'll need (depending on your financial situation).
Of course, you'll need to provide basic information such as your current address, phone number and a valid email address. However, it's always a good idea to provide the addresses of where you lived over the past few years — especially if you've moved around recently.
If you were a renter during your time at those addresses, gather any documents that verify your payment history and how much rent you paid.
Fortunately, your loan officer will guide you through the process of verifying rent and payment histories. Still, it's never a bad idea to have those documents ready to go before you apply.
As a Veteran with a VA-backed loan, you get access to highly beneficial mortgage refinance programs.
The Interest Rate Reduction Refinance Loan (IRRRL), also known as the VA Streamline Refinance, is one of the most effective refinance tools available to Veteran homeowners who want to lower their monthly payment and interest rate.
The reason people refer to this program as the streamline refinance is the reduced documentation requirements. For example, since you've already provided your DD-214 and COE with your original VA loan, you won't need to go chasing down those documents.
But, the most attractive benefit of an IRRRL is the documents the VA doesn't require you to provide:
While the VA doesn't require this, your lender might. Documentation requirements and guidelines vary by lender, so speak to your loan officer about any additional requirements when verifying income, employment and credit.
If you want to extract some cash from your home's equity, you can opt for a VA Cash-Out Refinance.
The cash-out refinance process is similar to your original VA loan, so you'll need to provide many of the same documents you needed for your original mortgage.
Keep in mind that a VA IRRRL/Cash-Out Refinance must provide you with at least one net tangible financial benefit. For example, you may not qualify if you just want to take out some extra cash from your home's equity, but the new loan simultaneously raises your interest rate and monthly payment.
The last piece is considering what to do with these documents as you're collecting them.
Many new homeowners often overlook the importance of keeping important mortgage documents. From the deed to the purchase contract, closing disclosure and home inspection report, keeping your home loan paperwork in a safe place will protect you from unforeseen problems arising after you close on your mortgage — such as an IRS audit.
You should keep some mortgage documents indefinitely and store them in safe spots like a fireproof box or in the cloud using password-protected folders. And, you should never send any of your mortgage documents to anyone who wasn't part of your mortgage qualification process.
Since mortgages require so much paperwork, it is smart to get your documentation house in order. Being a prepared homebuyer can prevent costly delays and get you to closing quicker.