What Will Cause A VA Loan To Get Disapproved?

Just like in any loan application process, there is a chance that your VA Loan will not get approved. There are a few factors that can impact this, including your financial situation and the home that you intend to purchase.

Your Finances

You will need to qualify for your loan amount, whether you use a VA Loan, a conventional mortgage, or another loan program. This means that your lender needs to feel confident that you are able to pay back the loan amount. Most lenders have a debt-to-income threshold that you need to meet. If your debt-to-income ratio is better, you might be able to get a better interest rate and more favorable terms. If you have a higher debt-to-income ratio (meaning you have more debt relative to your income than they want to see), you might need to search for a less expensive home or put some money down as a down payment to lower the loan amount.

The Home

To use the VA Loan, you do need to intend to occupy the home as your primary residence. During the closing process, your lender will order a home appraisal and a home inspection. The home must appraise for at least the value of the loan. An independent appraiser will come out to see the condition of the home and do market research to determine an overall value. As long as that amount is at least the amount of the loan, it will be approved. If it is too low, you may need to come up with some money to put as a down payment to lower the amount of the loan.

A home inspector will also go through the home to make sure that it meets minimum habitability requirements set forth by the VA. If it does not, the seller may need to fix certain items before you are able to purchase it using a VA Loan.