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.
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