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Both active-duty U.S. military service members and veterans are integral parts of keeping the nation safe. That’s why they deserve the loan benefits brought to them by the Department of Veterans Affairs. VA loans are flexible enough to cater to all members who sacrifice a vital part of their lives for the nation’s sake. Moreover, entering the housing market does not seem like a piece of cake for them. 75% of military buyers under 34 are now married, whereas 63% of married non-military buyers are struggling to land house financing.
While financial uncertainties appear, the loan process looks difficult. The falling credit scores are another matter of concern for military homebuyers. Even though the VA does not follow credit score criteria, lenders require a minimum of 550 scores. When they are on a mission to land one of the best VA loans for bad credit in Houston, it’s not easy. But things can take a hassle-free route once the eligible borrowers follow certain tips. They can ace dream homeownership if they work on their credit scores. From working with the choice of your lender to getting a competitive interest rate, there’s a lot.
In this article, we take a look at the easy tips to follow for increasing credit scores and landing a VA loan.
Credit Scores Do Not Have the Last Say
VA mortgages for military buyers offer low-interest rates and favorable loan terms. But, stellar credit is not everything. Then again the credit score influences the interest rate and loan terms. Actually, everything comes down to the lender.
You need to check your credit score before anticipating a lender’s approval. The lender determines the interest rate just the way it happens with conventional loans. What happens with a conventional loan is that the higher score brings in a better deal. The favorable rates are easy to crack with higher credit scores. And, the VA loans take the same path as conventional mortgages.
Take a Look at Your Savings
Have you saved enough? Many VA borrowers bear the misconception that savings do not matter at all. Especially when there is no down payment, people think there is no upfront expense either. However, some things are not frequently discussed. Take closing costs, for example.
You need to pay for loan origination fees, appraiser fees, application fees, real estate taxes, recording fees, hazard insurance, home inspection fees, and title insurance from your pocket. The third-party fees including brokerage fees need to be paid by the lender alone.
On top of it, VA funding fees are not to be missed. It is a one-time payment that applies to military buyers except those with a permanent service-related disability. The fee depends on the type of buyer you are and whether you will be making a down payment. Typically, expect to pay 3.6% of the loan amount.
In the end, the best VA loans for bad credit in Houston do not come easily. You need to work for it. Follow these tips and work with a lender who understands your needs.