How to Obtain VA Home Loan Entitlement

If you are self-employed and want to buy your own home, a VA home loan is one way of acquiring the equity in your home to finance the purchase. With this loan there is a Department of Veterans Affairs home loan entitlement, which gives the homeowner additional protection against lending costs associated with short sales.

If you've been injured in the line of duty or a member of the military and have to retire from service, then you qualify for VA home loan entitlement. A home loan entitlement replaces your mortgage as your home becomes your primary residence and the primary residence of your family.

Once you meet all the eligibility requirements, the VA will send you a Certificate of Eligibility for Home Loan Eligibility which lists your home loan entitlement, annual income, FICO score, veteran status, marital status, number of dependents and contact information for your Veteran's Administration Representative. On this application you will need to indicate how much money you will spend on a VA home loan entitlement.

You are also eligible to obtain a VA home loan when you purchase your first home if you are a veteran. You will be approved if you've had a record of satisfactory credit and a lower credit score. Your lender will also need to verify the same.

VA home loan entitlement is only available if you can prove that your inability to repay your home loan will have a financial hardship. To assist the VA in making that determination, they offer a VA home loan entitlement estimator. This estimator is a special kind of credit report created by the Department of Veterans Affairs, gives information about your credit worthiness and calculates a VA home loan entitlement based on that information.

The VA gives the estimator to any veteran who applies for a VA home loan but it is also available to self-employed veterans who might need it to determine their entitlement. The estimator is intended to be used as a final credit report, but it is a helpful tool to help determine if your home loan needs approval because of poor credit history.

In order to use the estimator, you must:

Contact your local loan officer to discuss your interest rate needs and to give you the estimator to use as a reference. Some lenders offer this free of charge, while others require a little research in order to find out what's available for you.

Once you have the estimate, contact your lender to request a quote on a VA home loan. Most lenders will charge a fee to compare rates; if not, they will help you to submit your application online.

Ask them for their interest rate quote for the kind of loan you want to apply for. Lenders typically use their own proprietary rate calculator to determine the interest rate they charge; however, most loan officers will offer a free quote for the type of loan you're applying for, based on your individual needs.

Next, complete your application and mail it back. Lenders may require additional information, so don't forget to send in proof of employment and income for your household. Most lenders require this information at the time of the application.

Once you have received a VA home loan entitlement and your loan has been approved, the lender will send you a Certificate of Eligibility for a VA home loan entitlement. The certificate gives you the right to use the home loan entitlement until you have sold the home.