3 Biggest Mistakes to Avoid When Applying for the Best VA Loan for Bad Credit
Having a place to call your own is one of the most cherished dreams of many. The U.S. Department of Veteran Affairs offers plenty of loan programs to help the ones who have served in the military to get a home loan. However, as credit score is one of the crucial things that lenders consider while approving the loan, lots of veterans don’t want to avail a VA loan program with the fear that their loan applications will be rejected for the low credit score.
Are you also living in the same fear? Well, you don’t need to worry as there are several lenders who offer the best VA loans for bad credit. But you should be careful while availing a VA loan with bad credit as a single mistake can prevent you from getting the loan. You can avoid your own buyer’s tale of woe by avoiding these mistakes.
Not clearing your payment history
If your credit score is low and you want to opt for a VA loan to realize your dream of having an abode that you can call your own, then you have to clear your payment history before applying for the loan. Your payment history will show how many debts are due and how many are cleared. If a large chunk of your debt is not cleared over a period of time, then it will not be good for you. It will create a negative impression in the mind of the lender that you will not be capable to pay the loan amount. And with this impression, no lender will be ready to approve your loan. If you don’t want to face such a scenario, then refrain yourself from doing this mistake, and pay the debt on time and clear your payment history.
Failing to show your stable income
Another mistake that most VA homebuyers made while applying for the loan with bad credit is not showing their steady income. They are not ready to share their income status with anyone and not even the lender. But you should keep this in mind that it can ultimately prevent you from getting a VA loan with bad credit from the lender. It is because a stable income which is equivalent to 24 months of consistent income is a major factor that can determine whether you are eligible for the loan program or not. When you have a stable income, the lender is convinced that you can handle your debt. But when you fail to show your stable income, it will create doubt in the mind of the lender, and there is a probability that your loan application will be rejected. So, don’t make this mistake.
Not making arrangements for a large down payment
You have to pay a large down payment to get a VA loan with bad credit. There is no fixed amount for the down payment; it can vary from lender to lender and based on the loan amount of the homebuyer. But one thing that is consistent that you need to make a large down payment. And if you are not making an arrangement of this, prior to applying for the loan, then you are making a huge mistake. Without a large down payment, the lender can deny to give you a VA loan. So, you should make an arrangement for the down payment. If it is difficult for you to manage it solely, then ask for gift money from your close family members and arrange it.
So, avoid these mistakes when opting for a VA loan with bad credit and make it easier for the lender to approve your VA home loan application.
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.