The VA home loan is one of the best mortgage benefits available to veterans, active-duty service members, and eligible spouses. With zero down payment, no private mortgage insurance (PMI), and competitive interest rates, VA loans make homeownership more affordable. However, many veterans miss out on these benefits or make costly mistakes that can delay or derail their home-buying process.
In this guide, we’ll cover the top five mistakes veterans make when using a VA loan and provide expert tips to avoid them so you can successfully purchase your dream home.
1. Not Getting Pre-Approved Before House Hunting
Why It’s a Mistake
Many veterans start shopping for homes before securing a VA loan pre-approval, only to find out later that:
- They don’t qualify for the price range they were expecting.
- They lose out on homes to pre-approved buyers.
- Their loan process gets delayed, affecting negotiations.
How to Avoid It
Before you start looking at homes, get pre-approved by a VA-approved lender. Here’s what you need to do:
- Check Your Credit Score: While the VA doesn’t set a minimum credit score, lenders typically require a 620+ score (some accept as low as 500).
- Calculate Your Debt-to-Income Ratio (DTI): Most lenders prefer a DTI of 41% or lower, though exceptions exist.
- Gather Key Documents: Be ready with your Certificate of Eligibility (COE), proof of income, tax returns, and bank statements.
- Choose a VA-Experienced Lender: Not all lenders understand VA loans well—work with one who specializes in them.
👉 Pro Tip: A pre-approval letter strengthens your offer in a competitive market, giving sellers confidence in your ability to close the deal.
2. Not Shopping Around for a VA Lender
Why It’s a Mistake
Many veterans assume that all VA lenders offer the same loan terms and rates, but this isn’t true. VA loan interest rates, fees, and requirements vary from lender to lender.
- Some lenders charge higher origination fees.
- Some may require a higher credit score than others.
- Some lenders specialize in VA loans, while others treat them as an afterthought.
How to Avoid It
- Compare Interest Rates: Even a 0.5% difference in rates can save you thousands over the life of your loan.
- Check Lender Fees: Look for origination fees, underwriting costs, and discount points.
- Read Reviews: Look for veteran-friendly lenders with good customer service and fast processing times.
- Use a VA Mortgage Broker: They can help shop multiple lenders for the best deal.
👉 Pro Tip: Get loan estimates from at least three lenders to find the best combination of interest rates and fees.
3. Ignoring Your Credit Report or Taking on New Debt
Why It’s a Mistake
Even though VA loans are flexible with credit, your credit score still matters. Veterans often make the following mistakes:
- Not checking their credit report before applying.
- Taking on new debt (buying a car, opening a new credit card, etc.) before closing.
- Missing payments or defaulting on loans, affecting their eligibility.
How to Avoid It
- Review Your Credit Report: Get a free copy at AnnualCreditReport.com and dispute any errors.
- Avoid New Debt: Don’t apply for new credit cards, car loans, or personal loans until after your home loan has closed.
- Make On-Time Payments: Keep your credit score stable by paying all bills on time.
👉 Pro Tip: A credit score increase of even 20-30 points can help you get better loan terms and lower interest rates.
4. Disrupting the Loan Process After Pre-Approval
Why It’s a Mistake
Once you’re pre-approved, your lender will monitor your financial stability until closing. Many veterans make the mistake of:
- Changing jobs or having income interruptions.
- Depositing large, unexplained sums of money into their bank account.
- Making major purchases like furniture, vehicles, or vacations on credit.
How to Avoid It
- Keep Your Job Stable: Avoid changing jobs unless absolutely necessary.
- Don’t Move Money Around: Large deposits may require documentation and delay loan processing.
- Hold Off on Big Purchases: Wait until after closing to finance furniture, appliances, or cars.
👉 Pro Tip: Lenders re-check your financials right before closing—even a small change could cause delays or even loan denial.
5. Misunderstanding VA Loan Guidelines and Costs
Why It’s a Mistake
Some veterans assume that VA loans cover all costs or that the seller must pay for everything. This misunderstanding can lead to unexpected expenses and complications.
Common VA Loan Myths:
- “VA loans cover all closing costs.” ❌ False! You’re still responsible for some costs, like appraisal and title fees.
- “Sellers must pay all closing costs.” ❌ False! The VA allows sellers to cover up to 4%, but it’s negotiable.
- “VA appraisals take forever.” ❌ False! They typically take 7-10 days—similar to other loans.
- “You can’t reuse your VA loan benefit.” ❌ False! You can use your VA loan multiple times, as long as entitlement is restored.
How to Avoid It
- Know Your Closing Costs: Expect to pay 1-3% of the home price in closing costs.
- Negotiate Seller Concessions: Sellers can cover some fees, but it’s part of negotiations.
- Work With a VA-Savvy Realtor: They’ll help you understand VA loan rules and avoid missteps.
👉 Pro Tip: Ask your lender for a Loan Estimate upfront so you’re not surprised by costs at closing.
Conclusion
Using a VA loan is one of the best ways for veterans to achieve homeownership, but avoiding common mistakes is key to a smooth experience. Here’s a quick recap of what to do:
✅ Get Pre-Approved First – Know your budget before house hunting.
✅ Compare Multiple Lenders – Don’t settle for the first offer.
✅ Check and Protect Your Credit – Avoid new debt before closing.
✅ Maintain Financial Stability – No job changes or large deposits.
✅ Understand VA Loan Rules – Be aware of costs and seller contributions.
By following these tips, you’ll be well-prepared for a successful VA loan journey. Ready to apply? Find a VA-approved lender today and take the next step toward homeownership!
FAQs About VA Loans and Common Mistakes
1. Can I use a VA loan more than once?
Yes! You can reuse your VA loan benefit as long as your entitlement is restored.
2. Do VA loans have closing costs?
Yes. VA loans reduce closing costs, but you’re still responsible for some fees.
3. Will shopping around for lenders hurt my credit?
No, multiple credit checks for a mortgage within 45 days count as a single inquiry.
4. Can I buy a fixer-upper with a VA loan?
Yes! You can use a VA renovation loan to buy and improve a home.Need personalized advice? Contact a VA loan expert today!