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Are you concerned about your poor credit rating? To get the best VA loans for bad credit in Houston, read this article!
What is a VA loan?
The US Department of Veterans Affairs created a mortgage loan program to help veterans and their families get house loans. The Department of Veterans Affairs does not make VA loans; rather, it establishes eligibility criteria, specifies the terms of eligible mortgages, and guarantees the loans against default.
Since this loan is guaranteed by the VA, the lender is protected from loss if the borrower defaults on the loan. It was established to honor and recognize military personnel for their efforts and accomplishments. The VA home loan program offers a relatively low-interest rate when compared to other lending programs. The seller will cover a portion of the closing expenses up to 4% of the loan amount. A termite inspection report is required for all VA house loans; this is one of the conditions that apply to all VA home loans but not to other loan programs.
A VA home loan can be used for a variety of things:
- To buy a house or a condominium
- To construct a house
- Make renovations to the home
- Refinance a VA loan that you already have
What are the eligibility criteria?
You must fulfill certain requirements to be eligible for a VA home loan. A surviving spouse of a veteran is eligible for a VA loan as long as they remain single until they reach the age of 57, at which point they will remarry. A spouse of a completely handicapped soldier who died as a result of this disease might also be held responsible. Both the veteran and the qualifying spouse must have a copy of the veteran’s DD-214. They can apply for the Certificate of Eligibility online or contact the VA office for further information.
To finance a house with a VA loan, most lenders want a credit score of at least 580. Veterans and military people with credit ratings of less than 580 can apply for a Freedom mortgage. Some lenders deal with purchasers with credit scores below 580 when refinancing with the VA IRRRL program. So, you can get the best VA loan for bad credit in Houston. You just need to have the correct information.
How does the VA loan work?
- There is no need for private mortgage insurance or a second mortgage since the loan is 100 percent funded.
- Servicemen and women, as well as their eligible spouses, are eligible.
- The VA receives a funding fee of 0 to 2.15 percent of the loan sum.
- Veterans can borrow up to 100% of the purchase price or the home’s fair value, whichever is less when purchasing a home.
- When refinancing a home, veterans can borrow up to 90% of the home’s fair market value where state law permits.
- The home must be used solely as a primary residence, must be occupied within 60 days of the loan closing, and must be the veteran’s primary residence for at least three years.
For any further queries, take professional help and get the best VA loans for bad credit in Houston.