Last updated: November 2025
Quick Answer
Common VA loan mistakes include entitlement miscalculations, misunderstanding the funding fee, failing to meet occupancy requirements, and failing to address property condition issues. Avoiding these pitfalls ensures a smoother path from pre-approval to closing.
Knowing what to expect when it comes to VA loan closing issues can protect your financing and help you use your benefits effectively.
Why VA loan mistakes still happen—even in 2026
VA loans are one of the most powerful home financing options available to service members, veterans, and qualifying spouses. But VA loans come with rules that differ from conventional or FHA loans.
Unfortunately, many buyers encounter VA loan mistakes during the pre-approval process, appraisal stage, or just before closing. These errors can lead to delays, denials, or unexpected costs.
Knowing what to avoid helps ensure your loan process stays on track.
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1. Not confirming your VA entitlement status early
Your entitlement determines how much the VA will guarantee on your loan. Some buyers assume they have full entitlement when, in fact, part of it may still be tied up in a previous VA-backed loan.
What to avoid:
- Skipping the Certificate of Eligibility (COE) step early in the process
- Assuming prior loan payoffs automatically restore entitlement
- Starting home shopping before confirming full benefits
Work with a loan officer who can review your entitlement and explain how it affects your purchasing power.
2. Misunderstanding the VA funding fee
The VA funding fee helps offset the program’s cost and is required for most buyers who aren’t exempt. Many buyers mistakenly think the fee is optional, or forget to budget for it at closing.
What to avoid:
- Assuming the fee is waived without proof of exemption
- Overlooking how the fee changes based on down payment and usage
- Ignoring the fee when calculating closing costs or the loan amount
Tip: You can finance the fee into the loan, but doing so increases your monthly payment. Always review your loan estimate carefully.
3. Not meeting the occupancy requirement
The VA loan program requires you to occupy the home as your primary residence within a reasonable time after closing, typically within 60 days.
What to avoid:
- Trying to use a VA loan for an investment property
- Buying a home you don’t plan to live in within the required timeframe
- Not informing your lender if active duty service prevents immediate occupancy
The VA makes limited exceptions (such as for deployed service members), but they must be documented in advance.
4. Making major credit or job changes during underwriting
Your lender checks your financial profile during the mortgage pre-approval application and again before closing. Any changes can trigger new documentation requests or even loan denial.
What to avoid:
- Opening new credit accounts or financing a car
- Changing jobs or quitting work during the loan process
- Skipping bills or making late payments
Keep your finances stable until after closing and consult your lender before making big moves.
5. Failing to budget for closing costs
While VA loans limit buyer-paid fees, they don’t eliminate all closing costs. You’ll still need to plan for things like:
- Escrow and prepaid taxes
- Title insurance
- Appraisal fees
- Homeowners insurance
What to avoid:
- Assuming the VA covers all closing costs
- Relying entirely on seller concessions or lender credits
- Underestimating the total cash needed at closing
Some costs can be rolled into the loan, but not all. Get a full breakdown early in the process.
6. Overlooking Minimum Property Requirements (MPRs)
The VA requires homes to meet Minimum Property Requirements to ensure they are safe, sanitary, and structurally sound.
What to avoid:
- Bidding on homes with known issues like peeling paint, exposed wiring, or roof leaks
- Assuming fixer-uppers are okay with VA financing
- Not preparing for potential repair requests after the VA appraisal
Tip: Work with a real estate agent familiar with VA guidelines to avoid wasting time on ineligible properties.
7. Not preparing for VA-specific appraisal delays
The VA appraisal process includes both value assessment and condition review. It often takes longer than conventional appraisals and may require repairs.
What to avoid:
- Not checking local VA appraiser wait times
- Underestimating how long post-appraisal repairs may take
- Delaying the appraisal order after contract acceptance
VA loans require the appraisal to be ordered by the lender, not the buyer or agent. Time this carefully to avoid pushing back your closing.
8. Missing documentation deadlines
The VA loan process requires detailed paperwork, from military service records to income verification. Delays in providing this documentation can push closing dates or stall underwriting.
What to avoid:
- Submitting incomplete forms (e.g., missing LES or DD-214)
- Waiting too long to respond to underwriter requests
- Failing to use secure portals or verified communication methods
Stay organized and ask your lender for a checklist early.
9. Ignoring residual income guidelines
VA loans require borrowers to meet residual income thresholds based on family size and region. This is different from the debt-to-income (DTI) ratio and is designed to ensure you have money left over after expenses.
What to avoid:
- Assuming approval based only on credit score and DTI
- Forgetting to include dependents when calculating thresholds
- Overestimating your qualifying income
A knowledgeable loan officer will run this calculation during pre-approval to avoid surprises later.
10. Waiting too long to lock your interest rate
Interest rates can fluctuate daily. Some borrowers wait to lock their rate, hoping for a better deal—only to find rates have risen before closing.
What to avoid:
- Delaying a rate lock during volatile market periods
- Not confirming your lock expiration date aligns with your closing timeline
- Assuming VA rates are automatically lower than other loan types
Your lender can help you time the lock correctly based on your market and file status.
VA loan closing issues are avoidable with the right team
Many VA loan closing issues stem from small oversights, such as missed paperwork, misunderstood rules, or homes that don’t meet property standards.
Working with a VA-savvy lender and agent helps ensure:
- Accurate entitlement calculations
- Proper handling of funding fees and exemptions
- Fast appraisal coordination
- Smooth underwriting and documentation flow
Avoid VA mistakes with the professionals at Salute Mortgage
Avoiding VA loan mistakes can save you time, money, and frustration. Whether you’re just starting or already under contract, having the right information and team makes all the difference.
Apply for your VA loan with Salute Mortgage.
FAQs: VA loan mistakes
A: Misunderstanding entitlement or assuming full benefits are available when part is already used. This can limit buying power or delay approval.
A: Yes. If new credit issues arise, if the home fails the VA appraisal, or if occupancy or income requirements aren’t met, the loan can be denied late in the process.
A: Most borrowers do, but exemptions exist for those with qualifying service-related disabilities or active-duty Purple Heart recipients. Documentation is required.
A: No. VA loans are intended for primary residences. You must certify occupancy within 60 days unless otherwise approved.
A: The appraisal will list required repairs, and the seller (or sometimes buyer) must fix them before closing. Failing to do so can void the loan.
