Military members and veterans in Washington often use VA loans when buying a home. This popular mortgage program allows borrowers to finance 100% of the purchase price, thereby avoiding the down payment altogether.
Like all government-backed mortgage programs, VA loans have specific requirements when it comes to documentation. Some document requirements come from lenders, while the Department of Veterans Affairs imposes others.
This article will review some of the standard documents needed for a VA loan in Washington and how borrowers can expedite the process.
Documents Needed for a VA Loan
Most of the VA loan document requirements overlap with conventional or traditional mortgage financing. That’s because VA-guaranteed home loans are provided by the same lenders that offer conventional financing.
However, some documentation requirements are unique to this program, because the U.S. Department requires them of Veterans Affairs. Below is a combined list that includes most documents needed when applying for a VA mortgage loan in Washington.
1. Certificate of Eligibility (COE)
The Certificate of Eligibility, or COE, is one of the most important documents needed for a VA Loan in Washington because you can’t start the process without it. It’s the first thing you must obtain before applying for a VA-backed mortgage.
As its name suggests, the Certificate of Eligibility proves to the lender that you’re eligible for the program based on your military service. The COE also states whether or not you’ve used a VA loan in the past and how much “entitlement” you currently have.
You can obtain this important VA loan document in one of several ways:
- Through a lender: Many mortgage lenders have access to the VA’s web-based application system and can request the COE on behalf of the borrower. This can help expedite the process because the lender can verify eligibility electronically.
- Through the VA: Borrowers can apply online through the VA’s eBenefits portal or the Department of Veterans Affairs main website. You must complete the VA Form 26-1880 (Request for a Certificate of Eligibility) to do this.
- By mail: Borrowers can also complete Form 26-1880 and mail it to the VA Eligibility Center, along with any required documentation. The mailing address can be found on the form itself or on the VA’s website.
2. Bank Statements
When applying for a VA loan in Washington, you must also provide some recent bank statements. Lenders usually request two months’ bank statements for mortgage underwriting purposes. Banks and lenders use bank statements to assess your financial stability and see your regular spending habits.
These statements can also be used to verify your assets and ensure you have sufficient funds for closing costs and other expenses. This is a standard document requirement for VA loans, FHA, and conventional financing. Depending on the lender, you may need to provide several months’ bank statements.
3. Tax Documents and Pay Stubs
Lenders typically request W-2 forms or 1099s for the past two years as part of the financial verification process. If applicable, you’ll also have to provide your most recent pay stubs. These VA mortgage documents help lenders evaluate your income stability and capacity to repay the loan.
4. Signed Purchase Agreement
If you get pre-approved for a VA loan before house hunting, you won’t have a signed purchase agreement yet. But you’ll need to provide it after you’ve made an offer on a home.
The purchase agreement (a.k.a., real estate contract) outlines the terms and conditions of the home purchase, including the sale price. The mortgage underwriter needs this document to verify the purchase price and finalize the loan paperwork.
5. Credit Report
Lenders pull your credit report to evaluate your credit history, debts, and outstanding loans. This information is used to measure risk and assess creditworthiness. The lender will request this information directly from the credit reporting bureaus. So there’s not much for you to do at this stage.
6. Employment Verification
Lenders not only want to make sure that you earn enough to handle mortgage payments, but they also want to see that you have a stable employment history. As such, lenders might also request verification of your current employment to ensure you have a steady income source to repay the loan. This can be done through a verbal verification process with your employer or via written verification.
7. Documents for Self-Employed Borrowers
Borrowers who are self-employed or work in the gig economy might have to provide additional documents when applying for a VA loan in Washington. This is unlike a traditional mortgage application process, as lenders want to ensure your business is viable. In these cases, mortgage lenders often request business tax returns and sometimes profit and loss (P&L) statements.
Note: This list includes the most important documents required for a VA loan in WA State. You might have to provide additional documentation not mentioned above depending on your situation.
8. History of Bankruptcy
Your lender will need to know if you’ve ever filed for bankruptcy or had a property seized at some point in the past. Filing for bankruptcy may or may not mean that you can qualify for a VA loan, depending on whether it’s been discharged or how far back the bankruptcy was filed.
Nevertheless, VA lenders still need to know about this type of history. As such, make sure you have related documents prepared to submit.
How You Can Facilitate the Process
As a borrower, there’s a lot you can do to facilitate and even expedite the document submission process. Being proactive from the beginning could help you reach the finish line sooner rather than later.
Here are some things to keep in mind when submitting documents needed for a VA Loan in Washington:
Start early. Don’t wait until the last minute to gather the documents required when filing for a VA home loan. Start early to avoid unwanted delays or surprises. At the very least, determine how and where to obtain your financial records so you’ll be ready when the time comes.
Go digital. Whenever possible, provide digital copies of documents to your lender. This can help expedite the review process while eliminating the need for physical copies, saving time and effort. These days, most mortgage lenders accept digital documents for VA loans.
Be responsive. Your lender or underwriter might need additional information or clarification during the document review process. Respond promptly to their requests to avoid delays.
In closing, several key documents are needed for a VA Loan in Washington. You would be well-advised to gather these documents early on and have them ready when you apply for a home loan to expedite the process and avoid any hiccups and delays along the way. Further, be sure to work with a seasoned mortgage specialist who has plenty of experience with the VA home loan application and approval process.
Have questions? Sammamish Mortgage specializes in the VA loan program and serves borrowers in Washington and across the Pacific Northwest. We can answer any questions about the loan process, including required documents and other criteria.