Get That VA Home Loan Even With Bad Credit Score
VA loans were created in 1944 to offer long time mortgage financing to USA veterans and their spouses. It is a mortgage loan guaranteed by the U.S.A. Veterans Affairs Department. It is however offered by private lenders. It allows the loaned veterans to purchase houses without needing a down payment. It allows for 103.3% financing without private mortgage insurance.
Veterans may borrow 103.3% of the sales price or reasonable value of the home, whichever is less. Since there is no private mortgage insurance more of the mortgage payment goes to qualifying for the loan amount or qualifying for a bigger loan. A VA funding fee of 0 to 3.3% of the loan amount is paid to the VA. It helps veterans get credit as despite their credit scores as they are capable of getting VA home loans with bad credit.
However, this is not always the case as many veterans are finding it difficult to meet the credit scores set by most private lenders which is 620. They have difficulty in reaching this score due to the difficulties they face as they try to adapt to the working environment after war most of them suffering from disability from the war they so selflessly devoted themselves to. Other reasons include trauma and lack of skill. For this reason, many of them work in jobs that offer little pay and hence making them rely heavily on debts. All these reduce their credit scores and a so a large number of them are having trouble getting VA home loans with bad credit with many of them not even managing 600.
How to get VA loans with bad credit:
The first and obvious way is to keep searching until you find a private lender willing to go below the 600 point. It is not an easy solution and will take a lot of time and effort but eventually you will find one as there are lenders who go as low as 580.
The second and more proactive method is to find a raise your credit score. Here are several ways of doing this. They include:
- Request your credit report and correct any errors it may contain.
- Pay your credit cards on time this helps raise your score. Set payment reminders if necessary.
- Reduce the amount of debt you owe. At this point it is advisable to put a large amount of your total budget into paying your current debt it will not seem that way at first but it will be ultimately rewarding when you have a house of your own.
These steps will ensure that you succeed in the process of getting a VA loan with bad credit.