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How are loans processed?
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There are two ways a lender may process VA home loans-on
a "prior approval' or "automatic" basis.
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Prior approval: When the loan is processed on a prior
approval basis, the lender takes your application, requests
VA to appraise the property, and verifies your income
and credit record. All this information is put together
in a loan package and sent to VA for review. If VA approves
the loan, a commitment by VA to guarantee the loan is
sent to the lender. The lender then closes the loan and
sends a report of the closing to VA. lf the loan complies
with VA requirements, VA issues the lender a certificate
of guaranty.
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Automatic: In automatic processing. the lender still
orders an appraisal from VA, but has the authority to
make the credit decision on the loan without VA's approval.
The biggest difference between prior approval and automatic
processing is the time saved by avoiding the need to await
VA's approval before loan closing.
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All lenders do not have the authority to process loans
on the automatic basis. Banks, savings and loan associations,
and certain other lenders such as mortgage companies which
are approved by VA have the privilege of processing VA
guaranteed loans using the automatic procedure.
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Lenders approved to participate in VA's Lender Appraisal
Processing Program (LAPP) are generally able to expedite
the processing of VA appraisals. |
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What should a veteran do?
1 |
If a lender is unwilling to accept a veteran's application
for a loan, what should the veteran do?
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2 |
The veteran should see another lender. The fact that
one lender is not interested in making the loan the veteran
wants does not mean that other lenders will not make the
loan
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3 |
What should a veteran do while waiting for loan approval?
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4 |
Sometimes it may take longer than you might expect
for the lender or VA to process your loan application.
For instance, your current or former employer may be slow
in returning an employment verification form, or it may
take some time to obtain a credit rating from out of State
creditors. Occasionally, the application VA receives from
the lender is incomplete in some important aspect and
requires that VA ask the lender to furnish additional
information before a final decision can be made. Ordinarily,
you should plan on an average of 4 to 6 weeks to obtain
a decision on your application.
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5
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In any case, information on the progress of your application
should be obtained from the lender, who will be most aware
of developments as they occur.
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It is most important that you not make any commitments
based on an expected approval of your loan. You should not,
for example, give notice to your landlord until the loan
is actually approved by VA (or by your lender if the automatic
processing procedure is used). Generally, it is not advisable
to move into the home before the loan is approved. If for
some reason the loan is not obtained, you could be faced
with additional expense and inconvenience. |
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Terms for Closing:
Please drop us a quick note, and we will contact you at our
earliest convience.
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