VA Loan Network logo
  • Home
  • Apply Now
  • VA Loans
    • Programs
    • Today’s Rate
    • VA Guide
    • Refinance
    • Requirements
    • Benefits
    • State Guides
    • Calculator
  • Resources
    • Bases
    • Pay Center
    • BAH Rates
  • Learn
  • About Us
    • About Us
    • Contact Us

The #1 Trusted Source for Veterans and Service Members

va loan network logo

SAME DAY APPROVAL

No Money Down, Low Interest Rates, No Mortgage Insurance

Check Your Eligibility

first lead form

"*" indicates required fields

Are you looking to purchase or refinance?
What is your goal?
Are you or your spouse retired or active military?
Active Military or Retired?
Are you receiving military retirement or VA Disability pay
Have you received PCS orders?
Where are you in the buying process?
Are you working with a real estate agent?
$350k - $400k
$0
$2m +
This field is hidden when viewing the form
This field is hidden when viewing the form
Is this the first use of your VA entitlement?
What is your credit score?
Do you currently have a home to sell?
Do you currently have a VA loan on your property?*
$350k-$400k
$0
$2m +
$200k - $250k
$0
$2m +
$100k -$120k
What is the rate on your loan ?

Enter your contact details

Name*

By providing your name, email, and phone number, you consent to receive calls and texts from our VA loan specialists and lenders regarding your application. Message and data rates may apply. Your information will be used solely for this purpose. You can opt out at any time.

This field is for validation purposes and should be left unchanged.

Top Mistakes to Avoid When Applying for a VA Loan

by Randall Yates | Oct 21, 2024 | VA Loans

va loan mistakes to avoid when applying

Navigating the VA loan process can be an incredible opportunity for veterans and active-duty service members to secure a home with favorable terms. However, despite its advantages, applying for a VA loan involves certain complexities. Avoiding common mistakes can ensure a smoother application process and increase your chances of approval. This article will explore the top mistakes applicants make when seeking VA loans, along with tips on how to avoid them.

With housing markets fluctuating in 2024, it’s more important than ever to be well-informed when applying for a VA loan. According to the National Association of Realtors, the average home price in the U.S. increased by 4.8% year-over-year, which impacts both buyers and sellers. Taking steps to avoid these pitfalls will help you take full advantage of the benefits a VA loan offers in today’s housing market.

AI Logo Your Article Summary
Paragraph Bullet Points

In this Article

  • 1. Not Understanding Eligibility Requirements
  • 2. Failing to Check Your Credit Score
  • 3. Overlooking the Funding Fee
  • 4. Not Getting Pre-Approved
  • 5. Ignoring Closing Costs
  • 6. Misunderstanding Occupancy Requirements
  • 7. Choosing the Wrong Lender
  • 8. Forgetting About the Appraisal Process
  • 9. Underestimating the Importance of a Down Payment
  • 10. Not Planning for the Long-Term Costs of Homeownership
  • FAQs About VA Loans

1. Not Understanding Eligibility Requirements

One of the most common mistakes is misunderstanding the basic eligibility criteria for VA loans. VA loans are available to veterans, active-duty service members, National Guard members, and certain surviving spouses, but specific service requirements must be met.

Avoid This Mistake: Ensure you obtain your Certificate of Eligibility (COE) from the VA early in the process. This document is essential as it confirms your eligibility and makes the application process smoother.

Quote: “A lot of applicants don’t realize they can request their COE online, which can save time,” says John Peterson, Senior Loan Specialist at Veteran Mortgage Group.

2. Failing to Check Your Credit Score

Although VA loans are more flexible with credit scores than conventional loans, your credit score still matters. Lenders typically prefer a minimum credit score of 620, but having a higher score can get you better interest rates and terms.

Avoid This Mistake: Check your credit report for errors and work on improving your credit score before applying. A higher score can save you thousands over the life of the loan.

Quote: “Even though VA loans don’t have strict credit score requirements, having a higher score can make a big difference in the rates and terms you’re offered,” says Sarah Taylor, Mortgage Consultant at Patriot Lending Solutions.

3. Overlooking the Funding Fee

The VA funding fee is a one-time charge that helps offset the cost of the loan program. Many borrowers forget to factor this fee into their budget, leading to unexpected financial stress. The amount of the funding fee depends on the loan type, the borrower’s military status, and whether it’s their first time using a VA loan.

Avoid This Mistake: Factor the VA funding fee into your upfront costs or include it in the loan balance to prevent surprises later on.

VA Funding FeeFirst-Time UseSubsequent Use
Purchase Loan (No Down Payment)2.15%3.3%
VA IRRRL (Streamline Refinance)0.5%0.5%
VA Cash-Out Refinance2.15%3.3%

Relevant Link: You can read more about VA loan fees on the official VA website.

4. Not Getting Pre-Approved

Some buyers assume that because they’re eligible for a VA loan, they’ll automatically be approved. This misconception can lead to delays and complications when you find a home. Pre-approval not only clarifies how much you can afford but also makes you more attractive to sellers.

Avoid This Mistake: Always get pre-approved before you start house hunting. Pre-approval gives you a clear idea of your price range and signals to sellers that you’re serious.

5. Ignoring Closing Costs

VA loans limit what you can be charged in terms of closing costs, but they don’t eliminate them entirely. Common closing costs include the appraisal fee, title insurance, and attorney’s fees. Some buyers assume the seller will cover these costs, which can cause problems during negotiations.

Avoid This Mistake: Budget for closing costs or negotiate with the seller to cover part of them. Be sure to ask your lender for a complete breakdown of these costs in advance.

Quote: “While VA loans cap certain fees, there are still closing costs you need to be aware of. Budgeting for these will prevent surprises,” says Mark Johnson, VA Loan Specialist at Freedom Home Loans.

6. Misunderstanding Occupancy Requirements

VA loans are specifically designed for primary residences, meaning you must live in the home you purchase using the loan. Some buyers mistakenly believe they can use a VA loan to buy a vacation home or investment property.

Avoid This Mistake: VA loans require that you intend to occupy the home as your primary residence. Make sure your plans align with this requirement before applying.

7. Choosing the Wrong Lender

Not all lenders are equally experienced with VA loans. Choosing a lender without VA loan expertise can lead to delays, higher fees, or outright denial.

Avoid This Mistake: Work with a VA-approved lender who has a strong track record of handling VA loans. A knowledgeable lender will guide you through the process and ensure you take full advantage of your benefits.

8. Forgetting About the Appraisal Process

The VA appraisal process is stricter than conventional loans, as it’s designed to ensure the home meets the VA’s Minimum Property Requirements (MPRs). Some borrowers mistakenly assume the appraisal is the same as a home inspection, leading to confusion.

Avoid This Mistake: Understand that the VA appraisal is different from a home inspection. You’ll still want to get a home inspection to identify any potential issues before closing.

Common Appraisal IssuesWhat You Can Do
Peeling paint in homes built pre-1978Ensure all paint issues are resolved before the appraisal
Roof issuesGet the roof inspected and make repairs if needed
Safety hazards (e.g., exposed wiring)Fix these issues before the VA appraisal

9. Underestimating the Importance of a Down Payment

While VA loans do not require a down payment, making one can significantly reduce your monthly payments and help you build equity faster. Some buyers rush into a no-down-payment loan without considering the long-term benefits of making even a small down payment.

Avoid This Mistake: If you can afford it, consider making a down payment to reduce your loan balance, lower your interest rate, and avoid paying as much over time.

10. Not Planning for the Long-Term Costs of Homeownership

Some VA loan applicants only think about getting into a home without considering the long-term costs, such as maintenance, utilities, and potential repairs. Overextending yourself can lead to financial stress down the road.

Avoid This Mistake: Budget for the long-term expenses of homeownership, including repairs, maintenance, and unexpected costs.

FAQs About VA Loans

1. What credit score is needed for a VA loan?

Most lenders require a minimum credit score of 620, though some may accept lower scores depending on other factors like debt-to-income ratio.

2. Do I need a down payment for a VA loan?

No, VA loans don’t require a down payment, but making one can lower your monthly payments and interest costs.

3. Can I use a VA loan more than once?

Yes, you can reuse your VA loan benefits multiple times, as long as your previous loans have been paid off or you restore your entitlement.

4. What is the VA funding fee?

The VA funding fee is a one-time fee that helps cover the costs of the loan program. It varies depending on whether you’ve used your VA loan benefits before.

5. What are the closing costs on a VA loan?

While VA loans limit certain fees, you’re still responsible for standard closing costs like the appraisal fee, title insurance, and attorney’s fees.

6. Can I use a VA loan to buy an investment property?

No, VA loans are intended for primary residences only. You must plan to live in the home you purchase.

7. How long does the VA loan process take?

The typical VA loan process takes 30-45 days, though it can vary depending on the lender’s workload and the complexity of your application.

Related Posts

va loansA Complete Veterans Guide to VA Loans va loan closing costsVA Loan Closing Costs va funding feeVA Funding Fee rolling va funding fee into your va loanCan You Roll the VA Funding Fee into the Loan? credit mistakes to avoid va loanAvoid Common Credit Mistakes When Applying for a VA Loan va loan requirements2025 VA Loan Requirements

Latest Articles

  • Rent vs. Buy for Active-Duty Service Members
    Rent vs. Buy for Active-Duty Service Members: How VA Loans Shift the Equation
  • New Real Estate Commission Rules VA Loan
    New Real Estate Commission Rules on VA Loans: What Veterans Need to Know
  • VA Adjustable Rate Mortgage Loans
    Why You Should Avoid VA Adjustable Rate VA Home Loans
  • $6,000 Grants for Veteran Homebuyers
    $6,000 Grants for Veteran Homebuyers: Your Guide to Assistance
  • Is the VA Funding Fee Tax Deductible?
    Is the VA Funding Fee Tax Deductible?
  • First vs. Subsequent VA Loan Use
    First vs. Subsequent VA Loan Use Explained
  • 2025 VA Loan Rates Are Lower Than Conventional Loans
    2025 VA Loan Rates Are Lower Than Conventional Loans
  • White House Reverses Trump’s Veterans Day Renaming Proposal
    White House Reverses Trump’s Veterans Day Renaming Proposal
  • Less Competitive Housing Market in 2025 Benefits Veterans
    Less Competitive Housing Market in 2025 Benefits Veterans
  • va Non-Allowable Fees
    Non-Allowable Fees for VA Home Loans
  • Understanding the Closing Disclosure on a VA Loan
    Understanding the Closing Disclosure on a VA Loan
  • Understanding the Loan Estimate on a VA Loan
    Understanding the Loan Estimate on a VA Loan
  • Title Insurance on a VA Loan
    Title Insurance on a VA Loan: The Ultimate Guide for Veterans
  • Homeowner’s Insurance on a VA Loan
    Homeowner’s Insurance on a VA Loan

Our Latest Article

Rent vs. Buy for Active-Duty Service Members: How VA Loans Shift the Equation

Rent vs. Buy for Active-Duty Service Members: How VA Loans Shift the Equation

VA Loans

  • VA Loan Guide
  • VA Benefits
  • Credit Requirements
  • Loan Requirements
  • First-time Homebuyers
  • VA Loan Process
  • VA Certificate of Eligibility

About Us

    • Apply Now
    • About Us
    • Contact Us
    • Legal Disclosures

 

Follow Us

  • Follow
  • Follow
  • Follow

Our Blog

  • Learn
  • VA Loans
  • Mortgage
  • Real Estate
  • Trends
  • Veteran Life
  • News
  • Credit

Copyright © 2025  VA Loan Network

3128 Napier Pk Shavano Park, TX 78231 Phone: (800) 230-7201 Email: [email protected]

Pin It on Pinterest

Share This
  • Twitter
  • Facebook
  • Pinterest
  • Tumblr
  • Like