Five key things veterans should know before filing an online mortgage application

Applying for a mortgage online has become common, and the appeal is obvious: you can get started from home at almost any hour. Still, a single missing pay stub or an overlooked guideline can slow the process, and delays may put your preferred home out of reach.

Veterans have extra factors to think about. VA loans come with valuable advantages, but they also include specific requirements. A bit of preparation can improve your odds of approval and may help you secure better terms. Here are five things to keep in mind before you apply.

1. Know which loan fits your needs

“The best home loan is the one that best supports your financial goals, not just the one you qualify for,” says Chris Birk, vice president of mortgage insights at Veterans United.

“VA loans offer a unique set of advantages that reflect the fact that this is a job benefit for those who’ve served our country,” Birk says.

Even so, a VA loan is not the right choice for every buyer. It may be a poor fit if you want a fixer-upper or a condo that is not VA-approved. The VA requires homes to meet safety and structural standards, and either issue can slow a purchase. Some sellers also lean toward conventional or cash offers because VA appraisals may require repairs before closing.

2. Keep your documents ready

“Having [your paperwork ready] can reduce delays and help the lender get a more accurate picture of your financial situation early,” Birk notes. “The goal is to avoid getting halfway through the process and discovering that a key piece of information is missing.”

Veterans usually need a DD-214, which is the discharge document. Active-duty service members need a Statement of Service signed by a commander or personnel officer. If you receive VA disability compensation, it also helps to have your VA award letter available.

3. Compare more than interest rates

“You want to compare rates, costs, fees and service among multiple financial institutions,” Birk says. Lenders do not price loans the same way, so even if your credit score and down payment are identical, one lender may offer a higher rate or larger fees than another.

Service can vary just as much. One loan officer may respond quickly and explain every step, while another may become hard to reach as closing approaches.

Choose a lender that regularly works with military borrowers. VA loans have their own rules, including property standards and limits on what lenders can charge. “Experience with those details can be important, especially when a borrower has a more complicated financial situation,” Birk says.

When comparing offers, start with the annual percentage rate, or APR, which includes fees as well as the interest rate, but do not stop there.

Review the closing costs and lender fees listed on each Loan Estimate, the standard form lenders must send after you apply. Ask how long the lender typically takes to close and look at independent customer reviews. “A slightly lower advertised rate doesn’t necessarily mean you’re getting the best overall deal,” Birk emphasizes.

4. Understand how online preapproval works

A mortgage preapproval is a lender’s statement of how much it is willing to lend, and the process can often begin online. “Instead of guessing what you might be able to afford, you’re working with an estimate based on a lender’s review of your financial information,” Birk says.

Getting preapproved before touring homes gives you a realistic budget and can keep you from falling in love with a property you cannot afford. “A preapproval letter can also help demonstrate to sellers that you’re a serious buyer who has what it takes to get to closing day,” Birk says. Some sellers and listing agents will not consider buyers without one.

5. Review your credit and finances

The VA does not set a minimum credit score, but individual lenders do, and many look for at least 620. If possible, aim higher, since a stronger score often leads to a lower interest rate and can save money over the life of the loan.

Benefits of applying for a mortgage online

Common mistakes veterans make when applying online

Online mortgage application red flags

How veterans can choose the right online mortgage lender

Frequently asked questions

Can veterans apply for a VA loan entirely online?

Veterans can complete most of a VA loan application online, including requesting a COE, uploading documents and tracking progress. You will likely still speak with a loan officer at some point, though. Whether closing documents can be signed remotely depends on your state and lender.

Is it safe to apply for a mortgage online?

Applying for a mortgage online is generally safe because lenders must follow federal rules that protect personal data. Even so, you will be sharing sensitive information such as your Social Security number and bank statements, so it is wise to confirm the lender is reputable first.

How many mortgage lenders should I compare before applying?

The Consumer Financial Protection Bureau recommends comparing at least three mortgage lenders before applying. Each additional quote can help you find a better offer.