The most common reason applications for VA home loans are denied is due to errors in the application itself. Lenders cannot issue loans unless they are sure that their personal and financial information is correct. Before submitting your request, take the time to review each statement you make and the numbers you enter. When you apply for home financing with a VA loan, you increase your chances of getting into a large home.
While most qualified veterans may qualify for funding, some will be denied their loan application. Although relatively rare, there are a few things that can influence the success of your VA loan application. Here's what you need to know. When lenders refuse a loan, they reluctantly do so.
VA lenders make money by approving loans, not denying them, so they can do what they can to get you approved. When they can't, they'll send what's called an adverse action notice. The Department of Veterans Affairs issues loan guarantees with easier qualification requirements than most conventional lenders. However, this does not mean that you are automatically approved just for your military service.
Some veterans are denied because of their military status, credit history, lack of income, or the terms of the loan they seek. In general, about 15 percent of requests are denied, but some may be able to reapply. Despite sophisticated software and heaps of documents you send, there are chances that your request will be rejected. Mistakes occur because it is humans who carry out the VA loan process.
When considering your financial history, it's important to note that past bankruptcies or foreclosures don't automatically mean that your VA loan application is denied. All loans are conditional until closing, which means that any loan can be denied at any time, until the funds are issued. If an automated underwriting system denies you a VA loan and you think one of these issues was at hand, don't give up. If you're struggling to get the housing finance you deserve and your VA loan applications have been denied, don't lose hope.
If you are considering buying a home or have applied for a VA home loan and you were denied, read on. Inexperienced lenders can also make mistakes that, even if not intentional, can result in denied VA loan applications.