Applying for and documenting a VA loan is indeed a process. There are lots to consider and your fair share of paperwork that will be needed. You'll speak with a loan officer who will guide you through the VA approval process and shepherd your loan from start to finish. Your credit report will be reviewed, file documented, property appraised, conditions fulfilled…a lot of people, many whom you will never even speak to, will touch your file in some manner before your VA loan can be approved. Who are they?
This is your key contact. This is most likely the very first person you interacted with when you were searching for the best VA lender. This person answered your questions for you and explained how the VA home loan approval process works. The loan officer provided you with an estimate of settlement charges and explained how much, if any, money will be needed to close the transaction.
The loan officer also prequalified you for a particular loan amount and once a loan application was received and your credit reviewed, a preapproval letter was provided to you to be presented to a seller when making an offer. The loan officer reviewed different VA loan programs with you such as a 30 year fixed, a 15 year VA loan or a VA hybrid. Until your loan is sent to the loan processor, the loan officer is probably the only person you've spoken to.
Once you've submitted your loan application and provided your loan officer with various documentation such as pay check stubs, W2 forms and bank statements, among a host of other documentation, your next newest friend is the loan processor.
The loan processor is the loan officer's right hand and main co-worker. The loan processor's job is to gather all the additional information needed before the loan can be submitted to the underwriter for final approval.
For example, if you provided just one pay check stub and the lender needs two, the loan processor will ask for it. There is a checklist that loan officers use that identifies what is in the file and what still needs to be provided.
The loan processor will contact third party services as well, ordering a title insurance report, an appraisal and other required documentation. As each piece of the paperwork puzzle arrives, the loan processor will put all the documents in a particular order for underwriting.
If there are any questions about your application or the underwriter requests more information or clarification, your loan processor will relay those requests to you.
This is the individual that makes the final determination on your loan. The underwriter reviews your application and the documentation in the file to make sure it meets the lending guidelines established by the VA. The underwriter will make sure the income is calculated correctly and your debt ratios are in line. If there is a discrepancy regarding income or bank deposits, the underwriter will ask for a written explanation from you.
The underwriter also reviews the appraisal to make sure it conforms to VA specifications. Once the file has been thoroughly reviewed and deemed in full compliance with VA lending guidelines, the loan file is sent to the closing department.
The closer prepares your loan documents that are sent to the settlement agent, typically an escrow officer or closing attorney. The closer does a final once-over, making sure the names match throughout the documents, that there is enough insurance on the property and other final inspections.
The closer also prepares the final instructions the settlement agent must follow before the lender sends over the mortgage money, called "funding."
This is the last stop. Besides your loan officer and possibly your loan processor, this is likely the only person you meet face to face as your VA loan sails through closing. The settlement agent follows the instructions sent by the lender, making sure you sign where you're supposed to sign, collect the required funds from you and once you've finished providing your signatures, about an hour later you're done. The package is then delivered back to the lender for review.
Once the lender has reviewed the paperwork and everything is in order, the lender now funds your VA loan. You're approved. It's time to get the keys and move in.
This process likely took up to 30 days to complete and several people were involved. You didn't get to meet most of them, but they are all an integral player when approving your VA home loan.