3 Types of VA Loans Explained: Choose the Best VA Loans for Bad Credit in Houston
While applying for a conventional loan, a veteran can face a mountain of strict eligibility criteria. Starting from the difficult credit standards, the list is endless. The requirements for conventional loans have been tough on the prospective buyers as well. Sending a breeze of relief, the VA loan programs seem promising. The VA loan has been true to its mission since its inception. It provides cost-effective and easily accessible home loan benefits to the military service members and veterans.
But did you know the VA loan program offers several types of mortgages? Depending on your financial situation, you can stumble upon the best VA loans for bad credit in Houston. The Department of Veterans Affairs has been also a huge help to the eligible spouses. Once you pass the eligibility requirement, you can put 0% down. If the mortgage is within the VA guarantee limits, no down payment is possible. Also, there is no need to purchase mortgage insurance. Furthermore, the mortgage is available for the borrowers with the less-than-stellar credit score. If you are interested in finding out the best type of VA loan, read on.
VA Purchase Loans
If a veteran qualifies with an adequate credit score (550 credit score), he can apply for the mortgage. The borrower must meet the income requirement too. Instead of struggling with a conventional loan, this is an affordable alternative. Meanwhile, remember to qualify for the debt-to-income ratio. Also, you need to have a qualifying financial history.
VA Cash-out Refinance Home Loans
If you need to borrow for home renovations, VA cash-out refinance loans help a lot. The authority will include the amount you are going to cash in the outstanding mortgage. It is still possible to pay off non-VA home loans. The VA also can pay off the conventional loan and offer a VA loan for a similar amount. It is a great plan when you are trying to qualify for a low-interest rate. So, the highest amount you can borrow is 100% of the home equity. Remember, you need COE for the loan program.
VA Streamline Refinance Loan
Also known as Interest Rate Reduction Refinance Loan, it can replace your existing VA mortgage with a new one. The program does not take place automatically. For this reason, you have to apply through a lender. When the market interest rate goes down, the buyers can apply with a low monthly payment and low mortgage rate. The loan program is also available in two forms, such as fixed-rate and adjustable-rate mortgages. Remember, it is not quite possible to refinance from a fixed-rate home loan to an ARM. The military homebuyers need to pay for VA funding fees. The program can be used for refinancing non-VA home loans. This home loan program is easier to qualify than a regular financing option. Unlike other situations, the lender does not review the credit score.
The VA loans not only have easy eligibility requirements, but they also have low closing costs. So, get the best benefits by choosing the ideal VA home loan!
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.