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Look, this is something I see every week in the Dallas-Fort Worth market: veterans losing out on homes because they showed up without preapproval. And honestly? It breaks my heart every single time.
Here's the reality. When you're competing against other buyers in today's market, sellers want certainty. They're often buying their own next home and can't afford to wait around wondering if your financing will fall through. According to Redfin (2025), VA loan usage climbed to 7.3% of all mortgaged home buyers nationwide in August 2025, up from 6.5% the previous year. That means more competition among VA buyers themselves.
But here's what most people don't realize: VA loan preapproval isn't just about impressing sellers. It's about understanding your actual buying power before you fall in love with a house you can't afford. I've watched too many borrowers tour homes for months, emotionally invest in a property, only to discover during the application process that their budget is $50,000 lower than they expected.
Let me clear up some confusion that comes up in almost every conversation I have with first-time VA loan users. There's prequalification, preapproval, and final approval. They're all different, and mixing them up can cost you a house.
Prequalification is basically you telling a lender what you think your finances look like. "Yeah, I make about $75,000 a year, have maybe $10,000 in credit card debt, and my credit's probably around 680." The lender takes your word for it and gives you a ballpark number. No verification, no documentation, no real commitment. Sellers know this, which is why prequalification letters carry almost zero weight in competitive markets.
Preapproval flips the script entirely. Now the lender is pulling your credit report, verifying your debts, reviewing your bank statements, and confirming your income with pay stubs or tax returns. They're actually underwriting your loan before you find the house. When you walk into a showing with a VA preapproval letter from AmeriSave, the seller knows you're serious and financially capable.
Even with preapproval in hand, you still need final approval after you're under contract. Why? Because final approval includes the property itself. The VA requires an appraisal to confirm the home meets their minimum property requirements for safety, soundness, and sanitation. The appraisal also ensures you're not overpaying by verifying the home's value supports your loan amount.
Final approval also includes one last check on your employment, income, and credit to make sure nothing changed since preapproval. This is why I always tell borrowers: don't buy a car, open new credit cards, or change jobs between preapproval and closing if you can possibly avoid it.
Before we even talk about credit scores or income, you need to confirm you're actually eligible for a VA loan. The Department of Veterans Affairs sets specific service requirements that vary depending on when and how long you served.
If you're currently serving on active duty, you meet the requirement after 90 consecutive days. That's it. Three months of continuous active service, and you qualify for one of the most powerful home loan benefits available to anyone in America.
For those who've completed their service, requirements depend on your service era. According to the U.S. Department of Veterans Affairs (2025), veterans who served from August 2, 1990 to the present need to meet one of several criteria. You qualify with at least 24 continuous months of active duty service. Alternatively, you meet the requirement if you served the full period you were called to active duty with a minimum of 90 days. If you were discharged due to hardship or force reduction, at least 90 days of service qualifies you.
If you served before August 2, 1990, different requirements apply. Check the VA's official eligibility page for your specific service dates.
You qualify with six years of service in the Reserves or National Guard. Another path to eligibility involves 90 days of active duty under Title 32 orders, with at least 30 of those days being consecutive.
Surviving spouses of service members who died while on active duty or from a service-connected disability may also qualify. This benefit provides critical support to families who've made the ultimate sacrifice.
Here's something important: if you were discharged due to a service-connected disability, the minimum service requirements don't apply. The VA recognizes that your service was cut short through no fault of your own.
Now let's talk about what lenders are actually looking for when they evaluate your VA loan preapproval application. The VA itself is remarkably flexible, but remember that your lender sets their own credit and income standards on top of the VA's basic requirements.
The VA doesn't mandate a minimum credit score, which surprises most people. But here's where reality hits: lenders absolutely do. According to LendingTree (2025), most VA-approved lenders look for a minimum score of 620. Some lenders go lower—I've seen approvals at 580 or even 550—but you'll typically face higher interest rates and more restrictions.
At AmeriSave, we work with borrowers across the credit spectrum, but I always encourage people to aim for 640 or higher. Why? Because at 640 and above, you typically qualify for better rates, higher loan amounts, and more flexible underwriting. Below that threshold, lenders get nervous about risk and compensate by tightening other requirements.
Let me show you what this looks like in practice. Say you're buying a $300,000 home with zero down. With a 620 credit score, you might see an interest rate around 6.75%, creating a monthly payment of $1,946 and total interest over 30 years of $400,560. Now compare that to a 720 credit score earning a 6.25% rate: your monthly payment drops to $1,847 with total interest of $364,920. That 100-point credit score difference saves you $99 per month and $35,640 in total interest. Worth working on your credit before applying, right?
Your debt-to-income ratio compares your monthly debt payments to your gross monthly income. The VA generally prefers a DTI of 41% or less, though this isn't a hard cutoff like it is with conventional loans.
Let's calculate what 41% DTI actually means for your budget. Imagine you earn $6,000 in monthly gross income. At 41% DTI, your maximum total debt would be $2,460 per month. If you're already paying $800 monthly for existing debts like a car loan, credit cards, and student loans, that leaves $1,660 available for your housing payment. That $1,660 needs to cover your mortgage principal, interest, property taxes, homeowners insurance, and any HOA fees. In the Dallas-Fort Worth area where I work, that might get you into a $250,000-$275,000 home depending on current interest rates and property taxes.
Here's what most people miss about VA loans: even if your DTI looks good on paper, you also need sufficient residual income. This is the money left over after paying your mortgage, debts, taxes, and estimated utilities. The VA wants to ensure you have enough to actually live on for necessities like food, clothing, transportation, and healthcare.
According to the Department of Veterans Affairs (2025), residual income requirements vary by region, family size, and loan amount. For a family of four in the South region with a loan over $80,000, you need $1,003 in monthly residual income. That's not negotiable.
This is where high DTI borrowers can still get approved. If your DTI is 45% but you have residual income 20% above the minimum requirement, many lenders will work with you. It's all about proving you can handle the payment and still maintain your quality of life.
Most VA borrowers pay a one-time funding fee that helps sustain the VA loan program. According to the U.S. Department of Veterans Affairs (2025), the funding fee for first-time users with zero down is 2.15% of the loan amount. Subsequent users pay 3.3%.
Here's the good news: you can roll this fee into your loan amount rather than paying it upfront. Let's see how that works with a $350,000 home purchase for a first-time user making no down payment. Your loan amount before the funding fee would be $350,000. The funding fee at 2.15% equals $7,525. Your total loan amount becomes $357,525. That $7,525 gets financed over 30 years as part of your mortgage, adding roughly $49 to your monthly payment at a 6.5% interest rate.
About one-third of VA borrowers are exempt from the funding fee entirely, according to Veterans United (2025). You don't pay if you receive VA disability compensation for a service-connected disability, are entitled to disability compensation but receive retirement or active-duty pay instead, received a Purple Heart and returned to active duty, or are a surviving spouse receiving VA compensation. Your Certificate of Eligibility will indicate if you're exempt.
This is where preapproval gets real. You need actual paperwork, not estimates. I recommend organizing everything in a folder before you even contact a lender, whether that's a physical folder or digital files on your computer. Being prepared cuts weeks off your timeline.
Your COE proves you meet the VA's service requirements. You can request it yourself through the VA's eBenefits portal, by mail using Form 26-1880, or ask your lender to pull it for you. Most lenders, including AmeriSave, can obtain your COE electronically within minutes once you provide your service details.
For veterans, you'll need your DD Form 214 showing your discharge status and character of service. Active-duty members need a statement of service from their commanding officer. National Guard and Reserve members need proof of their service time.
Bring government-issued ID such as your driver's license, passport, or military ID, plus your Social Security card or a document showing your Social Security number. Lenders need to verify they're working with the right person and run required background checks.
Lenders want to see two years of income history to establish stability. You'll need your last two years of federal tax returns with all pages and schedules included, plus W-2 forms or 1099s for the past two years. Gather your most recent 30 days of pay stubs showing year-to-date earnings. If you're self-employed, prepare business tax returns, profit and loss statements, and balance sheets.
Your lender will call your employer directly to confirm you're still working there and verify your salary. Have your HR department's contact information ready. If you've changed jobs recently, bring offer letters and explanation letters about the transition.
Lenders verify you have funds to cover closing costs and any required reserves. Provide your last two months of bank statements for all accounts, including checking, savings, and money market accounts. Include retirement account statements if you're using those funds, along with investment account statements and documentation for any large deposits over $1,000 from sources like loans, gifts, or sale of assets.
Be prepared to explain any unusual deposits. Lenders need to verify these aren't undisclosed loans that would affect your debt-to-income ratio.
Not all VA lenders operate the same way. Some specialize in VA loans and understand the nuances. Others process a few VA loans per year and treat them like conventional mortgages with extra paperwork.
According to Inside Mortgage Finance (2025), the top VA lenders typically close loans faster, have more experienced underwriters familiar with VA guidelines, and can navigate complications that stump generalist lenders. When you're competing for a house, closing speed matters.
During your lender search, ask about the percentage of their loans that are VA loans. Find out their average closing time for VA purchases. Request references from recent VA borrowers. Clarify their minimum credit score requirements and how they handle DTI ratios above 41%. Ask whether they allow automated COE retrieval or if you need to provide it yourself. Finally, determine if they can lock your rate during preapproval or only after you're under contract.
These questions reveal whether you're working with a VA specialist or a generalist lender who occasionally does VA loans. The difference matters when you're under contract with tight timelines.
Multiple credit inquiries within a short window count as a single inquiry for credit scoring purposes when you're rate shopping for a mortgage. That window typically spans 14 to 45 days depending on the credit scoring model. Don't let fear of credit damage prevent you from comparing lenders. The difference between the best and worst rate offer can easily exceed $100 per month on a $300,000 loan.
After you pick a lender, you'll fill out a long loan application. Most of the time, this is done online or with a loan officer who helps you through each step. You'll need to tell them about your job history, how you make money, what you own, what you owe, and what kind of property you want to buy.
The lender will look at your credit report, which shows all of your current debts, payment history, and credit scores from the three main bureaus: Experian, Equifax, and TransUnion. They'll also check your information against CAIVRS, the Credit Alert Interactive Verification Reporting System, which looks for defaults on federal loans like VA loans, FHA loans, or student loans.
Underwriting starts after the application is sent in. An underwriter looks over all of your paperwork, checks that the information matches what you said on your application, and decides if you meet the VA's and the lender's own requirements.
Normally, it takes 3 to 5 business days to get a preapproval decision. If you are self-employed, have had credit problems recently, or have more than one source of income, the process could take 7 to 10 days longer.
Your preapproval letter is your ticket to serious house hunting. It tells sellers exactly how much money you can borrow and proves that you have good credit.
A good preapproval letter has your approved loan amount, the type of loan (VA), the type of property you're approved for (like a single-family home or a condo), the date the approval expires, the conditions that must be met (usually related to the property), and your lender's contact information so that listing agents can check the approval if they need to.
A lot of people who borrow money don't know this, but you can usually ask your lender to show a lower amount on your preapproval letter than your maximum approval. If you want to buy a home that costs $350,000 but your lender says you can only borrow $400,000, ask them to send you a letter saying you can borrow $350,000. Why? You don't want the seller to know you have $50,000 more to spend because it makes it harder for you to negotiate.
How Long Does Preapproval Last?
Most lenders, like AmeriSave, only let you use preapprovals for 90 days. Your finances, interest rates, or credit profile may have changed since then. You will need to update your preapproval with new paperwork and a new credit pull if you haven't found a home in 90 days.
Now the fun part: actually looking for a house. Your preapproval gives you power and credibility, but you need to use it wisely.
In markets with a lot of competition, listing agents usually get all the offers at once and show them to the seller at the same time. Your offer has to be different. Including a recent preapproval letter from a trusted lender shows the seller that you're not only serious but also ready to close.
The VA Home Loan program has helped more than 48 million veterans buy homes since it started in 1944, according to the National Association of Realtors (2025). But here's what's different: Realtor.com (2025) says that veterans who use a VA loan with no down payment can buy a home 4.4 years sooner on average than if they saved up for a regular 12% down payment.
That time advantage is very big. The same study found that VA loans can speed up homeownership by up to 10 years in expensive places like Los Angeles. The advantage is still 2.7 to 2.8 years in places like Akron or Dayton, Ohio, where living costs are lower.
Sadly, some sellers and listing agents still think that VA loans are harder to close or more likely to fall through than regular loans. The data doesn't back this up, but what people think is important. You can get past these worries by choosing a good lender. For example, working with a VA specialist lender like AmeriSave shows sellers that you have professionals handling your deal. Give the seller a strong earnest money deposit to show that you are serious about buying the house and that you won't back out. Include a pre-inspection if you can. This will let you waive the inspection contingency and make your offer more appealing. You might want to write a personal letter to the seller to let them know you're a veteran and what owning a home means to you. Many sellers like to help people who have served.
Here's how to get ready for preapproval in the next few months if you're not quite ready yet.
NerdWallet says that for every 20-point increase in your credit score, your interest rate can go down by about 0.25 percentage points. That small difference in interest rates can cost or save you tens of thousands of dollars over the life of a 30-year mortgage.
Pay off your credit card balances so that they are less than 30% of your limits. Keep your balances below $3,000 if your total credit card limits are $10,000. Even better, try to get it below $1,000. Your credit utilization has a big impact on your score. If you lower it, your score could go up by 50 to 100 points in just a few months.
AnnualCreditReport.com is the only place you can get free credit reports legally in the US. You can check your credit reports for mistakes there. If you find any mistakes, dispute them. I've seen people raise their scores by 40 points or more just by fixing wrong collections or late payments that weren't theirs.
Getting rid of $1,000 in monthly debt gives you about $200 more in loan amount to buy a home, but this changes with interest rates. If you can pay off a $300 monthly car loan before applying, you might qualify for $60,000 more in home purchase price.
First, pay off debts with high monthly payments, not necessarily high balances. When figuring out DTI, lenders only look at the monthly payment.
Having several months' worth of mortgage payments saved up makes your VA loan application much stronger, even though it's not always necessary. If you have $10,000 in the bank after closing costs and your monthly housing payment will be $2,000, you have five months of reserves. That makes it easier for underwriters to approve higher loan amounts or ignore other small problems with your profile.
Pay close attention to unusual income records.
Lenders usually need two years of history to count your commission, bonuses, overtime, or self-employment income. But that money can give you a lot more buying power. If a borrower makes $60,000 a year plus $20,000 in bonuses, they can get a lot more home than someone who only makes $60,000 a year. However, the bonuses must be documented and stay the same over time.
I can't count how many times I've seen these mistakes mess up preapprovals.
Between getting preapproved and closing, don't apply for new credit cards, car loans, or personal loans. Every new account you open changes your credit profile, which could mean that your approval is no longer valid. Three days before closing, a buyer financed $3,000 worth of furniture, which put their DTI over the acceptable limit and caused them to lose their dream home.
Even if you pay in cash, big purchases can deplete your savings and raise red flags during final underwriting. You bought that boat with savings for $10,000? After closing, your lender may be worried that you don't have enough money set aside for emergencies.
Changes in jobs during the preapproval process make everything more difficult. If you have to change jobs, stay in the same field and make sure it's a clear step up. Even if you could make more money as a commission-based salesperson, lenders won't count unproven commission income, so moving from a salaried job to one with commission-based sales could hurt your approval.
Remember, VA preapproval is subject to the property meeting VA standards. VA loans usually don't cover homes that have serious safety problems, some types of manufactured homes, investment properties, or co-ops. Don't get too attached to a property until you've checked that it meets VA standards.
Getting preapproved for a VA loan is one of the most important things you can do when buying a home. It transforms you from a casual browser into a serious buyer ready to compete for properties in any market.
The data is clear: VA loans can help you buy a home 4.4 years faster than saving for a regular down payment, according to Realtor.com and Veterans United (2025). In markets with high prices, that advantage lasts for 7 to 10 years. But you can only get this benefit if you know how the preapproval process works and do it right.
Check to see if you qualify and get your Certificate of Eligibility first. Check your credit reports and fix any problems you find. Be honest when you figure out your debt-to-income ratio and look for ways to improve it if you need to. Organize your financial documents so that you are ready to talk to lenders when the time comes.
Pick a VA-specialist lender that has a track record of closing VA loans quickly and easily. Go through the preapproval process carefully, and don't be afraid to ask questions if something isn't clear. After that, take your preapproval letter and start looking for the house you deserve for serving our country.
The VA loan benefit is one of the best ways for veterans and service members to get paid. But Veterans United (2025) says that only about one-third of eligible veterans know they can buy a home with no money down. Don't let not knowing enough or being scared of the process stop you from getting benefits you've already earned.
Get in touch with the AmeriSave team today if you're ready to start the process of getting your VA loan preapproval. We know how to help veterans with their unique financing needs because we specialize in VA loans. Let's get you preapproved so you can start looking for the home you deserve.
Once you've sent in all the required paperwork, most VA loan preapprovals take 3 to 5 business days. If your finances are complicated, like if you are self-employed or have had credit problems recently, this could take 7 to 10 days. How fast it goes depends a lot on how quickly you send in the paperwork and how familiar your lender is with VA loans.
Yes, some lenders will give VA loans to people with credit scores as low as 580, and a few will go down to 550. But you'll have to pay higher interest rates and meet stricter requirements for other parts of your application, like your debt-to-income ratio and reserves. LendingTree (2025) says that most VA lenders want a score of at least 620. If you have a score of 640 or higher, you'll get much better rates.
If you have strong compensating factors, the VA will let you have a DTI ratio higher than 41%. The Department of Veterans Affairs (2025) says that acceptable compensating factors are residual income that is at least 20% above the minimum guidelines, a good credit history, a lot of cash reserves, or a lot of equity in your current home. Talk to your lender about which compensating factors apply to your case.
No, VA loans usually don't require a down payment, which is one of their best features. But if you make a down payment, your VA funding fee goes down a lot. The U.S. Department of Veterans Affairs (2025) says that first-time users who put down at least 5% will have their funding fee drop from 2.15% to 1.5%. This means they will save $1,950 on a $300,000 loan. Making a down payment lowers your monthly payment and helps you build equity more quickly.
The first credit check for preapproval usually lowers your credit score by 2 to 5 points for a short time. FICO says that if you apply for multiple mortgages within a 14- to 45-day period, they will only count as one inquiry. This means you can shop around without hurting your credit score. The small, short-term drop in your score is nothing compared to the benefits of being preapproved.
Standard VA loans require homes to meet certain minimum safety, soundness, and sanitation standards. Homes that need a lot of work often don't qualify. The VA does, however, have a Renovation Loan program that lets you borrow money for both the purchase and the renovations. If you're interested in a property that needs work, talk to your lender about this option.
Once you sign a contract on a property, your preapproval turns into a full application for that property. The lender orders an appraisal, checks your employment and assets one last time, and gives you final approval. Most lenders, including AmeriSave, say that this process will take 30 to 45 days from signing the contract to closing. However, streamlined loans can close faster.
Yes, spouses who are not veterans can also borrow money from the VA. Their income helps you get a bigger loan, and they will own the property. The veteran borrower, on the other hand, must meet the occupancy requirement and make the home their main residence.
Getting your Certificate of Eligibility is part of the VA preapproval process, which can take a little longer because of this extra step. But VA loans usually have better terms than FHA loans because they don't require monthly mortgage insurance and they are more flexible than regular loans because they don't require a down payment and have lower credit score requirements. The process of getting preapproved is the same for all types of loans. You need to show proof of income, credit, and assets.
You can still get approved for a loan after being denied. You'll get a letter saying you're not approved, along with the reasons why. These could be things like not having enough income, too much debt, a low credit score, or not having a stable job history. Fix these problems and then apply again in three to six months. Many people who are turned down for a loan the first time are able to get one after improving their financial situation.
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