An Essential Guide for VA Borrowers with Bad Credit in Houston

Are you a former military service member? Are you ready to apply for a VA loan program? Read and find out!

Does anyone say home-buying is a simple process? Probably, not! It can be if you qualified for the VA loan. The special mortgage program is exclusively designed for a former or active-duty military member. If you have also served your country and your work experience is eligible, a VA loan might be the best thing. From the Department of Veterans Affairs, it is a way of saying thank you to the deserving years. Now, the program has found its way to popularity through no down payment and other flexible guidelines.

Among the qualifying requirements, there is one thing holding crucial value. Many borrowers are found with bad credit. Due to working for the country, the credit score took a toll on their loan application. Conventional mortgages become pretty difficult to attain, and the VA home loan bad credit in Houston seems to be a perfect fit. Of course, it can be done – you can get a mortgage and settle down with your family in a new home.

As a first-time homebuyer, you might experience a tingling feeling of anxiety. But here is a way to walk through the VA loan process unscathed. The article deals with the tips that ease the process of a VA loan application for low-credit borrowers. Let’s take a look below.

How do you qualify for a VA loan with bad FICO scores?

The VA lenders consider a great deal of time for underwriting the loans. They set a minimum credit benchmark, and FICO scores below 550 are not uncommon. Make sure, you have more than 550 scores to apply for the mortgage. The Department of Veterans Affairs does not establish credit guidelines, the lenders can set them. As per the VA Handbook, the lenders must focus on the entire payment patterns. In case you have queries about credit scores, talk to the lender and understand how to qualify.

How do you get a VA loan with an outstanding balance?

Outstanding debts and late payments are common reasons behind bad credit. It is concerning when your credit does not fulfill the eligibility requirement. The moment your credit score sinks below 620, you should go through the credit report. Also, look for lenders who are ready to work with such low credit scores and high debt-to-income ratio. When there is a lot of debt and very little equity on the house, you should talk to the lender.

Another important thing that every borrower wants to know is whether they can apply with a history of foreclosure or bankruptcy. Being eligible for a VA loan is much simpler than a conventional loan. You might have to wait for a few years (two or three) if you have had a bankruptcy or foreclosure. There is no reason why you should worry about a VA loan. This is not a one-time benefit; hence, you can relax after receiving the COE. So, compare the terms and benefits offered by the lenders. Research and understand what they have in store for you.

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