Can I Get A VA Loan With Bad Credit?

July 7th, 2012 | Author:

The United States Veteran’s Administration insures loans for eligible veterans and active duty military personnel. The VA does not actually lend the money; you still must qualify through a mortgage broker. Think of the VA as a type of mortgage insurance in the event you cannot pay the loan as promised. Also, as long as you have a valid Certificate of Eligibility you can qualify for home loan without making a down payment. Total financing is very rare in the traditional mortgage market even for people with excellent credit. How much you can borrow depends upon your income and living expenses.

Most VA-approved lenders are much more flexible with credit problems than they would be for a regular mortgage loan. However, this does not mean you can have a long history of not paying your bills on time and still qualify for a VA loan with 100 percent financing. If you qualify, you might be able to get two VA mortgages for two different homes either at the same time or at different times during your life.

Credit scores are usually an important part of the mortgage approval process; these scores take into consideration the length of your credit history, how many accounts you have, how much you owe as compared to your available credit limits and whether you pay your bills on time. Lenders working with the VA do not really place too much emphasis on credit scores. But they want to see at least 12 months of consistent on-time payments on your existing credit cards and loans. If you do not have a credit history, you probably need to get at least a small loan or credit card. Pay it on time for a year and then try to get your VA mortgage.

If collection agencies are after you, you will not be able to get any type of home loan until you settle the matter. Unpaid accounts in bad standing can lead to lawsuits against you, which could put your home equity at risk. Hence, why mortgage lenders require you to resolve any collection accounts against you before finalizing a loan.

Keep in mind that the VA will only allow your spouse to co-sign a mortgage loan and that spouse must be from a marriage recognized by your state’s government. Thus, spouses from common-law marriages or domestic partnerships might not qualify especially if your state does not legally recognize the union.

Posted in Mortgage | Tags:

Newest Answers

Get a Better Credit Score in 2017

January 22nd, 2018 | Author:
h

[I]f you have a goal to improve your credit score for the new year, you need to set up steps to help you achieve this goal. For many, they read all kinds of information about how to get a good credit score, and it can be overwhelming. Sometimes, it can sound so easy but not […]

Continue Reading »

Why You Need to Check All Three Credit Reports

January 19th, 2018 | Author:
h

[T]here are three major credit reporting agencies: Experian, Equifax and TransUnion. All of them provide a credit report which lists your personal information and credit accounts. You can get one report for free each year or purchase extra reports through the agency sites. Many people just get one credit report, but you really should get […]

Continue Reading »

What is the Right Amount for a Credit Limit?

January 18th, 2018 | Author:
h

[A]s you get credit cards, you will notice they give you a credit limit. This is the maximum amount you can spend on the card without paying some of it off first. Credit card companies often increase your credit limit as you prove responsible handling the amount you have. You may wonder if more credit […]

Continue Reading »

Buying a Car with Bad Credit

January 12th, 2018 | Author:
h

[I]f you have bad credit, it can be difficult to qualify for a car loan. However, it’s not impossible. Before you go out and apply for money to purchase a vehicle, there are some things you should know. Check Your Credit Before you fill out any applications for car loans, you need to take a […]

Continue Reading »

What Does No Credit Mean?

January 10th, 2018 | Author:
h

[M]any people hear that they have bad credit, which means they haven’t always been responsible with their credit accounts. However, it is another situation entirely when a person is told they have no credit. You may wonder how that’s possible and what it really means for your future. No Credit Doesn’t Mean Never Any Credit […]

Continue Reading »

What You Need to Know about TransUnion

January 8th, 2018 | Author:
h

[T]ransUnion is one of the three credit bureaus which stores information about consumers and their credit history. It provides this information to creditors and to consumers. TransUnion was founded in 1968, and it now has more than 200 offices through the US and the world. How TransUnion is Different TransUnion is similar to the other […]

Continue Reading »

What You Should Know about Equifax

January 5th, 2018 | Author:
h

[E]quifax is one of the three major credit reporting agencies which provides information used on your credit report. It has a credit score which will impact your ability to get approved for new credit. All of these agencies aren’t the same, so here is some information you should know about Equifax. Equifax is headquartered out […]

Continue Reading »