VA loans include many advantages that FHA loans and conventional loans do not offer. As is the case with any home loan, however, an underwriter must review all of your documentation and requirements to ensure you qualify. Why might and underwriter deny your VA loan? Here are some of the more common reasons and some advice for ensuring your loan approval isn’t delayed.
Employment consistency is key throughout the loan approval process. Underwriters often become skeptical of job changes and may view your new employer as an unreliable source of income. If a job change to a more reliable employer is inevitable for you during the loan process, be sure to contact your loan officer to ensure that all measures are taken to confirm that necessary documentation is provided to the underwriter.
One of the last steps the underwriter will take is reverifying your credit. When doing so, if the underwriter discovers new debt, it could have the potential to compromise your loan. Keep in mind that even small loans can alter your debt-to-income ratio to the extent that your VA loan is denied. Ultimately, the safest move is to not incur any new debt during the loan process and keep your overall spending to a minimum.
A lot of underwriting these days is done automatically. Essentially, lenders are able to input all relevant documentation into software that can determine whether or not you qualify. While these systems deliver accurate answers reliably, there is still potential for human error to creep in. If your information is entered incorrectly, it could result in a false denial.
Human error can make its way into your application itself as well. Try to be absolutely certain that all the information on your submitted documentation is correct and up to date. Underwriters are very thorough, and if there is an error on your application, it could lead to delays or a rejection altogether.
There are several factors that can result in a VA home loan being denied. At Clearview Realty, we believe that the veterans who served our great country are entitled to own a piece of it and we pride ourselves in working with veterans who have been turned down by other lenders. If you have found yourself in this situation, give us a call today at (720) 217-5731. We would love to help make your dream of homeownership a reality.