Are you thinking of using your VA loan benefit to buy a home—but unsure where to start or what VA Loan mistakes to avoid? Whether you’re a first-time homebuyer, a seasoned real estate investor, or a professional helping military clients, applying for a VA mortgage comes with its own unique rules and common missteps.
This guide breaks down those key VA Loan mistakes, helps you understand the application process more confidently, and offers actionable tips backed by data, comparisons, and clarity.
Why VA Loans Matter
A VA (Veterans Affairs) loan is one of the best mortgage options available to eligible military borrowers. Backed by the U.S. Department of Veterans Affairs, this loan offers:
No down payment
No private mortgage insurance (PMI)
Competitive interest rates
Flexible credit requirements
These benefits can save buyers tens of thousands of dollars over the life of the loan—if they avoid common mistakes.
Top Mistakes to Avoid When Applying for a VA Mortgage
1. Not Checking VA Loan Eligibility Early
Many assume they qualify, but VA loan eligibility has specific requirements related to service length, duty status, and discharge type.
Action Tip: Use the VA’s eligibility tool to confirm your status.
Common Oversight:
Failing to request your Certificate of Eligibility (COE) in advance can delay your loan application.
Real Example: A buyer lost out on a home because their COE was delayed. Solution? Request it as soon as you start shopping.
2. Assuming All Lenders Handle VA Loans the Same Way
Not all lenders are VA-approved or equally experienced in processing VA loans.
Comparative Insight:
- Lender A: Charges 2% loan origination fee, takes 45 days to close.
- Lender B: Charges 0.5%, closes in 25 days, and specializes in VA loans.
Action Tip: Shop multiple VA-approved lenders. Use comparison tools like Bankrate or NerdWallet.
3. Skipping Preapproval
Jumping into home shopping without a VA loan preapproval can lead to disappointment—or even lost offers.
Why It Matters:
- Sets your realistic price range
- Shows sellers you’re serious
- Speeds up closing
Bonus Tip: Use a VA loan affordability calculator to estimate your range before speaking with a lender.
4. Overlooking the VA Funding Fee
While VA loans skip PMI, they include a funding fee—a one-time charge that varies by service type, down payment, and loan use.
Example:
- First-time use, no down payment → 2.15% funding fee
- Subsequent use, no down payment → 3.3%
- 5% down → drops to 1.5%
Pro Tip: Veterans receiving VA disability compensation are exempt from the funding fee—don’t miss this if it applies to you!
5. Buying a Home That Doesn’t Meet VA Standards
VA loans come with Minimum Property Requirements (MPRs) to ensure homes are safe, sound, and sanitary.
Risk:
Some homes—especially fixer-uppers—may not qualify unless repairs are made first.
What to Do:
- Work with a VA-savvy real estate agent
- Include VA addendums in offers
- Have backup plans for properties that may not pass inspection
6. Underestimating Closing Costs
Even without a down payment, you’ll need cash at closing for:
- Appraisal fee
- Title insurance
- Loan origination charges
- Prepaid taxes and insurance
Typical Range: $3,000–$7,500 depending on home price and location
Smart Strategy:
Negotiate for seller concessions (VA allows up to 4% of the home’s price) to cover closing costs.
7. Not Budgeting Beyond Your BAH
Many military buyers use their Basic Allowance for Housing (BAH) to guide how much home they can afford.
Problem: BAH doesn’t account for unexpected repairs, utilities, HOA fees, etc.
Realistic Budgeting Tip:
Keep your monthly mortgage payment under 30% of your take-home pay, even if your BAH allows more.
8. Choosing the Wrong Loan Term
VA loans offer both 30-year and 15-year options.
Comparison:
Term |
Pros |
Cons |
| 30-Year | Lower monthly payments | More interest over time |
| 15-Year | Save on interest | Higher monthly payments |
Interactive Tip: Try the VA loan amortization calculator to see long-term savings for both terms.
9. Missing Out on VA Refinance Options
If you already have a VA loan, don’t overlook the Interest Rate Reduction Refinance Loan (IRRRL).
Lower interest rate
Minimal paperwork
No appraisal in most cases
Perfect for: Those who bought when rates were high and want quick savings.
Pro Tips for Real Estate Professionals
If you’re assisting VA buyers:
- Understand the VA appraisal process
- Guide them toward VA-friendly lenders
- Include VA contingency clauses in offers
- Be ready to educate sellers on VA loan legitimacy and benefits
Further Reading:
How to Support Military Buyers with VA Loans
Summary: What You Should Do Next
Key Takeaways:
- Confirm your eligibility and request your COE early
- Get preapproved and compare multiple lenders
- Understand the funding fee and check for exemptions
- Work with VA-savvy agents and budget beyond your BAH
- Don’t ignore property requirements or closing costs
- Revisit refinance options if you already have a VA loan
Ready to Take the Next Step?
Use our VA loan calculator to explore your options
Or contact a VA-experienced lender or real estate professional to walk through the process with confidence