Every mortgage loan has to be underwritten within a certain time frame before it is closed and approved. With VA loans, the objectives of underwriting are twofold. First, underwriters want to make sure: The borrower is a good credit risk, and second, they want to make sure that the loan will be paid if the borrower defaults. Although the goal with VA financing is similar to that of conventional financing – to get high-quality mortgages at fair prices – there are some additional steps involved in the underwriting process.
How long does it take for underwriters to approve a VA loan? You can check with the HUD-approved loan counselors in your area to find out. Most conventional loan counselors will be able to tell you how long it typically takes for them to get their client’s loan approved. You can also contact the office of Housing and Urban Development in your area to find out. HUD-approved loan counselors can also provide you with a listing of the specific requirements, your lender will require in order to submit an acceptable loan proposal to their traditional lenders. Although the exact steps may vary from lender to lender, these steps generally stay fairly consistent.
To get a VA financing loan, you first need to meet the qualifications. If you have bad credit or none at all, you will likely have to pay a higher interest rate or, at least, have more costly fees and costs added to your loan. For this reason, many people end up paying a higher monthly mortgage payment or taking out larger loans to pay for homes they bought in a VA auction. While the government encourages people to buy from its own VA department stores and to list their homes in its own agency stores, not everyone is approved. The VA doesn’t operate regular loan stores and doesn’t dole out conventional loans that are based on credit scores. Because of this, how long does it take for underwriters to approve a VA loan is longer than a conventional loan with similar terms.
Once you know the number of VA-approved loans that have been issued in the last six months, you can work backward to see how long it takes for underwriters to approve other types of loans. You may find that the standard process takes quite a while for loans larger than five hundred dollars. Even though it is typical for these kinds of loans to take about twelve to eighteen months before they are finally approved, how long does it take for underwriters to approve even bigger loans? In these cases, you may find it takes longer still. Since the criteria for each kind of loan is different, it is impossible to give an exact number, but you can get a feel for how long it typically takes for your type of loan to be made available.
How long does it take to get a regular appraisal on a VA-backed loan? These appraisals are used to help determine what the real value of the property is. If the appraiser gives the final price much more than the market value, then the lender will often have to go back to the issuing entity to get the money to close the deal. Since these loans are backed by federal funds, their final appraisals are subject to federal guidelines.
How long does it take for underwriters to approve a standard bank loan? Most banks take between ninety and two hundred days to complete the process. Banks also require additional documentation from applicants that they submit along with their applications. This can take anywhere from ninety to three months. When you need a VA-backed loan quickly, it’s best to work with a specialized sub-prime lender who has connections in the system to get your application approved as quickly as possible.