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Do not lose hope if you have bad credit. In the 21st century, bad credit is a common thing, and lenders are very much aware of it. Especially, your sacrifice for protecting the country and its citizens gives a solid reason to have bad credit. That’s why the Department of Veterans Affairs knows how bad things can be. Your current financial state does not leave a menacing effect on your future as a homeowner. Before you dig deeper, remember a few things about VA loans and bad credit scores.
Akin to other loan programs, VA also has a minimum credit score benchmark. It is necessary that buyers appear with moderate credit risk. However, the lenders offer the mortgage and not the Department of Veterans Affairs. Now, it is quite obvious why they prefer borrowers with solid credit scores in this socio-economic climate. The VA guidelines show that there is no fixed credit score requirement for the borrowers. But the lenders are in control of setting the credit score benchmark. When you notice your credit score is falling behind, you can work on it.
Of course, you can manage the VA home loan bad credit in Houston, but you still need to remember a few tips for a hassle-free run. Let’s take a look below.
Go over the definition of bad credit
Less-than-stellar, bad, and poor – these are the common words associated with credit scores. However, a borrower with poor credit will be able to apply for a VA loan. Eventually, he/she can fulfill the dream of ownership. Further, the reality of mortgage or homeownership does not constitute credit scores only. Yes, VA lenders consider the scores in the mortgage industry. They collect credit reports from various credit reporting agencies. Instead of brooding over your bad credit, focus on what score you need.
VA loan and bad credit – it’s possible
Everything comes down to your perception of credit score. How are you defining bad credit? Blemishes on credit reports are very common. But you can manage to have more than 660 credit scores. The VA loans allow borrowers with bankruptcy and foreclosure. Usually, VA lenders ask for at least 550 credit scores. The VA loan benefits are not a one-time thing, so you can expect a less-challenging path. Also, the loan program allows co-borrowers. If you are applying to the program with your spouse, your spouse’s FICO score matters. The second income proves to be of great help. However, do not get him/her on board if there are credit issues.
It is always better to combat the credit challenges even before signing the loan program. Boost the scores and raise the number. It may be time-consuming, but you can expect lower mortgage rates and better benefits. While you are on the way to increase credit scores, you need to stay determined on your part. Find a lender who is willing to guide you in this situation. Also, shop around for the best VA loan in Houston. So, good luck with a new chapter of your life!