VA loans are home loans that are offered to certified veterans who have been out of active duty for at least two years. This is a great program to take advantage of, regardless of credit score, but it does option a very attractive option for those who have less that perfect credit who might not qualify for a home loan in any other way. The VA loan program is a means by which home ownership for veterans is possible, regardless of credit history. One must be able to manage mortgage payments, of course, but poor credit will not block one from getting a VA loan, nor will it shoulder someone with undue financial burden by way of excessively high interest rates.
In order to qualify for a VA loan, one must possess a VA Certificate of Eligibility. The form for this can be filled out online, at your local VA office and even at many real estate offices. These loans are generally for either 15- or 30-year fixed rate mortgages that allow our veterans the ability to own their own home.
The VA itself does not have a minimum credit score requirement in order to qualify for this loan program, but the lenders that work with the VA do generally have requirements. Those with scores as low as 580 have been approved for VA loans, but most lenders have requirements that one must have a credit score of at least 620 to qualify for a loan. In addition to this minimum credit score, you can also have no negative marks on your credit report in the past year.
There are many benefits to a VA loan, as they allow for lenders to provide favorable loan terms to veterans, even those with less than perfect credit, rivaling the rates of those with great credit who obtain a loan without the VA loan program. With a VA loan, you either provide a very small, or no down payment at all to get into your home. You also do not have to carry mortgage insurance on your home, which can save you a significant amount of money. The VA guarantees your loan for 25% of its total value, in the event that you default on your loan. This guarantee allows lenders to give you loan terms as though you were putting down a 25% down payment on your home, allowing you to take advantage of very favorable rates, regardless of poor credit score.
[W]hether you are just starting out on your own or just starting over, one of the most important things you can do is learn how to budget. Many people think they know how to budget, but they fail to stick with it. So, the goal is to not just create a budget, but to create […]
[I]f you’ve been learning about credit, one of the first things you’ll hear is you can’t get credit if you don’t have credit. It often seems to be a Catch-22; no one will give you credit so you can’t get established with a credit history so you can get new credit. With diligent effort, you […]
[S]ometimes when you are filling out a rental or job application, you’ll come to a page that asks you to sign and authorize a credit check. Most people will sign it, hoping for the best if they have less than perfect credit. Even when you do sign it, you may wonder if that was the […]
[I]f you’ve applied for a job, you may have been asked to provide authorization for the potential employer to look at your credit report. While you signed it just to be considered for the job, you may wonder why they need to know about your credit history. What are employers looking at when they review […]
[Y]ou hear all about the minimum credit score needed to get a credit card or loan. It seems like this one magic number seals your fate. You wonder if creditors or lenders even look at the information in your credit report or if they just use that number to get a decision for your application. […]
[T]here’s a lot of information on a credit report. If you’ve ever requested a free copy of your credit report, you may have been overwhelmed at all of the stuff on there. It makes you wonder what creditors and lenders really look at. Do they read every line or do they skim? If they skim, […]
[A]fter the recession of 2008, more people have become conscious of debt. Some of them have decided to give up using credit cards or other forms of credit in favor of a cash-only approach. While this is a good idea for people with bad spending habits or those who have a tendency to live beyond […]