An Idaho VA loan pre-approval letter is a document granted by an Idaho VA mortgage lender that states that based on preliminary information such as the potential borrower’s credit, assets, and income, that they qualify for a Veterans Administration loan of a specified amount.
It is different from a pre-qualification in that some or all of the submitted information is reviewed for accuracy before the letter is issued.
Having a pre-approval letter from your Idaho VA lender will show home sellers that you are a qualified buyer and may lead to your offer being more seriously considered.
Once you have obtained your Veterans Administration loan pre-approval letter, you will then be able to begin making offers on homes you are interested in purchasing.
In order to get your VA loan pre-approval letter, your lender may require the following:
- At least one months pay stubs or LES (if still active duty).
- W-2’s and Tax Returns for the past two years.
- Two months bank statements for any/all assets.
- Your DD 214 form (if no longer on active duty).
- Statement of Service from S1 (if still active duty)
Your pay stub is needed to show that you are currently employed, as well as your current income. W-2 statements (for the past two years) then show how much you normally earn in a year.
If you are currently still on active duty, your Statement of Service must show a minimum of 12 months remaining on your contract.
Finally, your DD 214 form will enable your Idaho VA mortgage lender to decrease the amount of time necessary for processing your certificate of eligibility. Once again, this is not required, but it is generally a smart idea.
The reason why this is a smart idea is that the majority of direct lenders with the Veterans Administration can put in an order for your certificate of eligibility, which determines whether or not you are eligible for a VA loan.
The process can be very quick as long as you turn in all these documents as soon as possible to your loan officer.
After your Idaho VA loan officer or lender has the described documents, he or she can submit your information in the VA loan analysis software to determine your eligibility. The calculation that will determine your eligibility is:
(Monthly Income) – (Proposed Mortgage Payment + Insurance + Taxes + Utilities for the house + Monthly Credit Card Payments Due) = Residual Income
Residual income is the amount of money that you have after you have paid the sum of your monthly bills. The VA will use their judgment after they have calculated your residual income to decide if you will have a satisfactory amount of money left over after you have paid your bills.
The VA has established various requirements for what your minimum residual income will have to be, such as what part of the country you live in, the size of your family, how old your children are, and various other factors.
When obtaining VA pre-approval letter, be aware that simply getting the letter does not commit the lender to giving you a loan. It just means the initial information has been reviewed. In order for the mortgage application to be approved additional information and documentation about both the borrower(s) and the property must be reviewed to be sure that all of the guidelines are met.
Idaho VA 100% Home Financing Frequently Asked Questions. Many Veterans have questions about the Idaho VA 100% home loans that are available to them. Below I have outlined some of the most frequently asked questions.
Q: What is a VA Guaranteed Home Loan?
A: VA guaranteed home loans are loans made to eligible veterans for the purchase of a home as their primary residence. The guaranty means the lender is protected against loss if you fail to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.
Q: Does my entitlement guarantee that I will get a home loan?
A: No VA cannot compel a lender to make a loan that would violate their lender policies.
Q: How much is my entitlement?
A: Your basic entitlement is $36,000. For loans in excess of $144,000 to purchase or construct a home, additional entitlement up to an amount equal to 25 percent of the Idaho VA county loan limit for a single family home may be available . This means that qualified veterans could get a no down payment purchase loan for those amounts.
Q: How do I apply for a VA guaranteed loan?
A: You can apply for a VA loan with my company who is a mortgage lender that participates in the VA home loan program. At some point you will need to get a Certificate of Eligibility from VA to prove to the lender that you are eligible for a VA loan.
If you have any questions about a VA home loan feel free to contact us.
Rick & Jane May
ID MBL-2550 / NMLS # 173614/12870