3 Things to Know about VA Home Loan Bad Credit in Houston
Are you a veteran, military officer, or a surviving spouse? Do you want to buy a home and so apply for a home loan program? Then, a VA mortgage that is specially designed for military professionals will be the right choice for you.
But are you worried about your three-digital credit score that shows your creditworthiness? Wondering whether you can apply for a VA home loan bad credit Houston? Well, you will be happy to know that there are several lenders who offer low credit VA loans. You can opt for them.
And here are a few things that you should know about bad credit VA loan –
- You can get a VA loan with a bad credit score
Although a bad credit score makes the process of securing a VA home loan more difficult, it does not mean that it is impossible to secure approval. By focusing on other factors such as down payment, interest rate, your home requirement, debt-to-income ratio, employment history, you can show yourself as an eligible homebuyer and secure a VA loan from a lender.
- You need to know VA’s credit score requirements
The Department of Veterans Affairs (VA) does not set a minimum credit score requirement on the VA loan. But the VA isn’t actually lending the money, only guarantees the loan in case you default. It is because of this, many VA lenders want to see at least a 580 FICO score, but the cutoff can vary by the lender, the loan type, and other important factors. You may find a lender willing to process your VA loan even if your credit score is not good enough. But with this, you may not opt for the best interest rate. So, if possible, you should take steps to improve your score before applying for a VA loan.
- Check about typical credit ranges for a VA loan
When you are applying for a VA home loan program, it is important to put that common 580 benchmark in perspective. The FICO credit score used by most VA home loan lenders runs from 300 and 850. These scores fall into different categories with some variation in credit score categorization based on the preferences of the lender. If your credit score is more than 750 then it is considered an excellent credit score. And the score is in the low 700s range, it is considered as good credit, while a score to the upper 600s is mentioned as fair credit and below 620 as subprime credit. This means VA lenders will approve your loan application even when you have a subprime credit score. You can check your credit score from three major credit bureaus to know your score belongs to which category.
Now, start looking for a VA lender and apply for a VA loan as early as possible. Your dream of homeownership is just a few steps away from you.