5 Tips To Get Preapproved For a VA Loan

Understanding VA Loan Preapprovals

A VA loan, backed by the U.S. Department of Veterans Affairs, offers significant benefits, such as no down payment and no mortgage insurance, making it a great option for veterans and servicemembers.

Understanding how this loan is different from a conventional loan, plus your VA loan eligibility, are good starting points. A VA loan preapproval helps you determine how much you can borrow and gives you a better idea of what homes you can afford. It’s the initial assessment that a lender makes to check if the borrower meets their qualification criteria.

Once you find the right home, the lender will still need to formally approve your loan, even if you have preapproval.

What Is VA Loan Preapproval?

Preapproval for a VA loan involves lenders reviewing your debt, income, and other factors that will determine your ability to make the monthly mortgage payments.

The lenders will request relevant documents to verify your income, assets, and identity. They will also run a hard credit check to assess your debt load and determine your creditworthiness for the loan program.

VA Loan Preapproval vs. Prequalification

Before applying for a VA loan, it's important to understand the difference between preapproval and prequalification. These two steps are often confused, but they have distinct meanings and purposes.

The key difference is that prequalification is an estimate based on your financials, while preapproval involves a more thorough review of your finances.

During prequalification, lenders ask for estimates of assets, income, and debt to check if you qualify for a VA home loan. They use this information to determine your debt-to-income ratio and estimate the maximum amount you are prequalified for.

In contrast, VA loan preapproval provides a more accurate picture of your financial situation. Lenders take a closer look at your income, assets, and debts, and they’ll request your formal documents to give you a clear idea of how much home loan you can borrow and the terms for borrowing.

Why Preapproval Is So Important

If you’re thinking about purchasing a home, getting a preapproval for a VA loan is important for many reasons, such as:

• When you know the loan limits you’re preapproved for, searching for a new home becomes easier.
• You may be able to stand out from other competitive buyers when you have a mortgage preapproval for a government-backed loan like a VA loan.
• The closing process will be streamlined and smooth once you’re preapproved.
• You’ll know the terms of the loan in advance, so you’ll know what you’re getting into when you start the house-hunting process.

5 Tips To Get Preapproved For Your VA Loan

When getting preapproval for a VA home loan, it’s essential to look for the right VA-approved lender and ensure you have all the documents required to ensure you’ll get a favorable response. Here are five tips to improve your chances of getting approval for a VA loan.

1. Improve Your Credit Score

Your credit score is an important financial indicator. When it comes to VA loans, minimum score requirements vary by lender. Most lenders prefer borrowers with a minimum credit score of 620. Get a free copy of your credit report from the three credit bureaus and check your ranking before you apply for preapproval. 

If your credit score is lower than what the lenders are looking for, it’s best to work on improving your credit score first. Pay your bills on time, reduce your debt load, and dispute any errors on your credit report.

In case your credit score is low due to significant debt, consider exploring veteran debt relief programs to help reduce your financial burden.

2. Reduce Your Debt-to-Income Ratio

Your debt-to-income ratio (DTI) compares your gross monthly income against debt payments. The Department of Veterans Affairs doesn’t set a specific income threshold for potential loan borrowers. Instead, the VA and lenders assess your ability to afford a home by evaluating your DTI ratio.

If your DTI ratio is too high, you may not qualify for the loan. If it's high due to a lot of unsecured or veteran debt, start paying it down as soon as possible. Lowering your debt will reduce your DTI, improving your chances of qualification and possibly expanding the price range for which you can qualify.

3. Check Your Eligibility

Before you apply for a loan, you’ll need to get a Certificate of Eligibility (COE). This certificate demonstrates that you meet the service requirements to be eligible for the VA loan. Additional requirements for getting a COE include:

• Served 90 days in wartime
• Served 181 days in peacetime
• Served 90 days under Title 32 duty, of which at least 30 days are continuous, or served six years in the Reserves or National Guard
• Survived a spouse who lost their life due to a service-related disability or was killed in the line of duty

Some of these service requirements are waived if you have a service-related disability and were discharged. You’ll need a military discharge document if you’re a veteran and a Leave and Earnings Statement if you are currently serving to get the COE.

4. Gather the Required Documents

Documents needed for a VA loan preapproval usually include:

• Current driver’s license
• Social Security Card
• Bank Statements
• Proof of employment
• W-2s
• Certificate of Eligibility
• Discharge Document
• Statement of Service
• Tax Returns

Having all these documents handy will ensure you’ll be able to speed up the approval process.

5. Apply for VA Loan Preapproval

Once you have all your documents and are in a good financial position, it’s time to apply for VA loan preapproval. You can apply for the preapproval in person or online.

If you’re sending an online VA loan preapproval application, the lender will evaluate it, and a representative will reach out to you to ask for additional documents needed. They’ll review your finances and eligibility to determine how much you can qualify for.  

How Does The Preapproval Process Work

Preapproval adds weight to an offer you place on a home. In a competitive real estate environment, sellers may only consider offers that include a copy of the preapproval letter. Let’s take a detailed look at how the VA home loan preapproval process works.  

Application Review

After you submit your application, lenders will carefully review your information and the documents you've provided. You'll typically need to submit financial documents like bank statements and pay stubs to help verify your financial details.

Lenders will evaluate factors such as your income, debt-to-income ratio, credit score, and employment stability. This allows them to build a clear picture of your purchasing power and determine how much you can borrow.

Property Appraisal

A preapproval is not a guarantee of a mortgage. To receive formal approval, you’ll have to go through the underwriting process. This includes presenting a specific home you like for appraisal.

Property appraisal is an important step, and like many other government-backed loan options, VA loans are available for primary residences where you plan to live full-time. You can use your VA loan benefits to purchase a qualifying single-family house, mobile, or modular home.

The appraisal process includes taking a look at the property to ensure it meets the Minimum Property Requirements (MPRs), which are a high-level overview of the property.

You don’t need a home inspection for a VA loan, but it’s a sound investment because it can uncover some issues and repairs that you can ask sellers to fix before you purchase the property.

Final Decision

Once the loan officer reviews your application, they’ll provide you with a final decision. If your application is approved, you’ll receive a letter of loan preapproval.

This preapproval is valid for up to 90 days, after which you’ll need to update the document and have your credit reports pulled again. A hard credit pull can slightly lower your credit score, but it’s necessary to get a preapproval.

Preapproval letters usually include a list of conditions that are not to be mistaken for guaranteed financing. Still, they show sellers and real estate agents that you have validated purchasing power.

You can expect the preapproval process to take up to a week, but it can be faster than that in most cases.

What Happens If Your VA Loan Preapproval Is Denied?

“If your initial VA loan preapproval was denied, and you’re sure you currently meet all the qualifications for getting preapproved via this program, it's possible that there might be an error on your application or something was entered wrong by someone, somewhere in the process,” explains Brad Reichert, Founder and Managing Director of Reichert Asset Management LLC.

Reichert offers hope for those not initially approved. “It could also be because of a previous credit issue that was missed or because your preapproval was downgraded to a manual underwriting decision. This could happen because of the need to clarify or confirm a particular fact or data point. The next step is to identify the issue and address or correct it so you can reapply for preapproval and go shopping for your new home,” Reichert shares.

Lasting Financial Stability

VA home loans remain one of the most valuable benefits available to veterans and active-duty service members. VA loans are assumable, require no down payment, and offer competitive interest rates, making them an accessible path to homeownership for thousands of military families every year.

Preparation is key. Understanding eligibility requirements, organizing your financial documents, and improving your credit profile will make the preapproval process faster and less stressful. A strong preapproval gives you the clarity to move forward confidently and find the home that fits your needs.

If you’re managing unsecured debt while preparing to buy a home, TurboDebt® can help. Our team provides personalized debt relief solutions that help clients reduce balances and rebuild financial stability before major life milestones.

Contact us today to learn how TurboDebt can help you take control of your finances and move closer to a debt-free life.