How to Get a VA Home Loan & Learn Practical Tips on Qualifying For A VA Loan
What are the VA Home Loan Requirements?
Home ownership is one of the cornerstones of the so-called American dream. Who more than our veterans deserve to have a slice of this dream? The VA loan program was designed to make it easier for Veteran to receive loans to purchase homes. Home ownership is on of the time tested paths to wealth, stability and the transference of the values that most people in this nation hold dear.
In this article, we will discuss the requirements for qualifying for a VA long and answer all the questions that most people have about this type of loan. We will cover the following subjects: Military service requirements, VA minimum housing requirement, Credit score requirement, Income requirement, and Down payment requirement. We will also give you tips for how to improve your credit score, how to get more out of your income and all the little tricks that make qualifying for a loan and managing a loan much easier than it typically is.
What is the Minimum Credit Score for VA Loan?
The king decider when it comes to home loans are a person’s credit score. In this section we will discuss the role of credit score when it comes to qualifying for a VA loan bad credit. We will discus the minimum credit score that most lenders require and when they will accept a lower credit score. Credit is king in home lending so figure out how to increase and protect yours.
We know that VA loans are often much easier to qualify than some other forms of loans but there still is a credit score requirement. The credit score requirement falls into a range with a minimum score of around 640 being the average score that most lenders require.
Can you get a VA loan with bad credit?
If there are mitigating circumstances such as being credit poor but cash rich and being able to make a large down payment, having made payments that have not yet shown up in ones credit report and other such things, some lenders will qualify a borrower with a credit score as low as 580. Ultimately it is best to do all that you can to increase your credit score. The things that get most people into trouble is when they have late payments, unpaid charge offs, a high DTI (Debt To Income ratio) and if they don’t have revolving credit accounts that have been open for at least two years. Learn what it takes to improve your credit score and put those things into action. Building your credit score is much easier than you probably think and in some cases it is easy to increase your credit score by 30 to 50 points in just one year.
Bad Credit VA Loan Lenders and Income Requirements
It is very difficult to purchase a home without money and a person’s monthly income is a common metric that goes into factoring how much home they can or cannot afford to purchase. In most cases the more money you have, the higher loan amount you will be able to qualify for but credit still matters and is something we emphasis when anyone is buying a home. In this section we will discuss the role of income in the VA loan qualification process.
This section is much related to the credit section and that is because it takes a specific amount of income to qualify for a specific loan amount. In most cases, you will need to have a monthly income of 2.5 times the amount of the mortgage for a house. Your credit score will come into play because it effects your interest rate which then effects your monthly payment. The higher your credit score, the lower your interest and monthly payments. One way to increase your monthly income is by reducing debt and freeing up the money you would use to make payments towards your mortgage.
Down Payment Requirements
Here is one thing that can hold up most people when using a traditional loan. In this section we will discuss the role of a down payment in the process of qualifying for a VA loan.
One of the biggest benefits and reason why VA loans were created is because it allows veterans to purchase a home without a down payment. The VA rules state that there is no down payment for homes that cost $417,000 or less but this can sometimes be higher if the home is in a high property cost county and in those cases the max goes to around 1 million dollars.
Military Service Requirements for a VA Home Loan
What type of service qualifies a person for a VA loan? Which wars? Which branches of military service? In this section we will answer all of these questions and more. The number one requirement is achieved by receiving a Certificate of Eligibility and this is done by have VA Form 26-1880, it is this form that will make a service man qualified for a VA loan. Another form is a proof of service form which is called the DD-Form 214. Both forms are used when current and former service men and women are seeking VA loans, GA Bill benefits and medical benefits. Your very first step is getting these forms to submit with any other loan requirement information. The sooner you get all the formalities out of the way, the sooner you will be along the process of qualifying and purchasing your new home. It is best to get the paper work done as soon as you can so that then you can focus on looking for your dream house.
VA Minimum Property Requirements
Not all properties qualify for a VA loan. The VA minimum property requirement is a criteria that lists the attributes that a property must meet before a VA loan can be applied to it. Some of these are location based, price based, Loan To Value based, size, type of property structure and other attributes. What does this mean for you? It means that you must do your homework and immediately find out if a home is able to be purchased with a VA loan. It is best to find this out as soon as possible and before you get your heart set on a property. In the past, the VA loan process was really slow and many sellers did not like VA loan purchasers because it slowed down the process. In today’s world this is no longer a problem since all VA lending duties are handled on the side of private lenders who make the process go along much smoother and quicker than it did in the past.
Not just any house will qualify for a VA loan and in this section we will discuss the role of the VA’s minimum property requirement.
Summary to get you ready for home ownership after serving our country!
As you can see, there are many requirements for qualifying for a VA loan. We have listed several things that are needed and that people often ask about VA loans. We have discussed the various forms that need to be submitted to prove proof of service and eligibility for a VA loan. We discussed the credit requirements, the income requirements and how to improve these things to qualify and to lower payments and afford more house. We hope that this information helps in the process of educating you and putting you into a new home. It really is an easy process when you understand it, when you work with a broker who has experience with these type of loans and when you do exactly what you are doing right now, your homework. Best of luck to you.