When you find your next home, the process to get to the closing table may seem like a lifetime. The best way to ensure a smooth and timely closing is to understand the processes at work, and to make sure you, and the team behind you, are staying on top of them.The entire process, from start to finish, should take approximately 30-60 days to complete, with some outliers falling outside of those timelines.
After the initial application is submitted, the lender will order a VA appraisal on the home, which is a mixed valuation and safety inspection and required on every VA loan. If the appraisal comes in low, or the home does not meet the minimum property requirements, you must either ask the seller to lower the price, pay the difference out of your own pocket, or cancel the transaction. There is a fee of over $500 for VA appraisals, but some lenders may offer to cover this. Normally, a VA appraisal will be completed within 10 days of ordering, but in high traffic seasons, this timeline may be extended.
Often confused with the appraisal is a home inspection. This is much more in-depth, and is a top-to-bottom look at the home’s structure and everything within it. There are many tiers of inspections, and you may choose anyone certified as your inspector. As this is not required by the VA, your home inspection will be paid for out of pocket. While every VA buyer has the right to skip the inspection, it is a tool to keep in your pocket for negotiation or cancellation of contract.
After these major hurdles have been completed, the loan will be sent to underwriting for processing and approval. During this period, your financial information will be assessed in-depth with a goal of verification that you will be able to successfully make payments. One key component is to make sure that you do not make any major financial changes in this period. The majority of loans that get denied are because of errors on the actual application. It is essential to assure completion and accuracy prior to sending the application.
Once approved by the underwriter, your loan will be forwarded to the closing department. This exciting step is where the paperwork is formalized and the documents are gathered for signing. As you are called to the closing table, you will be asked to review and sign many documents, including your settlement statement. This statement is a running itemization of the financial aspects of the loan. You, or the seller, will also have to pay any closing costs due at this point. Once accuracy and full completion of documentation is confirmed, funds will be released and you will officially become the homeowner.
While there are many components to closing a loan, having a strong team is your corner will ensure a seamless process and timeline. Make sure to grab our VA loan checklist here https://mhnguides.net/valoanchecklist to help you progress through the process, and remember that organization and preparation are the key to successful approval and home ownership!