How Credit Affects Your VA Loan
While the VA does allow you to acquire a loan even with a less-than-perfect credit score, it will still affect some aspects of your mortgage. Remember that the VA is not actually making your loan. They are only guaranteeing that a certain percentage of it will be repaid. So even though most lending institutions can relax their requirements for a VA loan, they will still have some minimum requirements that must be met.
If you are starting the process for a VA loan, you should make sure your credit is as good as possible. There may be some spots on there that can be disputed and removed. You may also find that now isn’t the best time to apply for a home loan. Instead, you can take some time to build your credit back up to the necessary level. Speak to one of our loan specialists to find out more about how your credit situation affects your ability to secure a home loan.
Bankruptcies, Debts, and Foreclosures
A bankruptcy can make it difficult to get a loan, but not impossible. If you have a Chapter 7 bankruptcy at least two years must pass before you qualify, and in the case of Chapter 13 bankruptcy you only have to wait one year.
Collections, if they are minor, may not have to be fully paid off as a condition of the loan, but if you are delinquent on any federal debts (tax liens, student loans, and other programs) you will not be able to qualify for a loan. A foreclosure on a previous property, however, can make you ineligible for a VA mortgage for at least two years.
There are many other credit issues that could have an impact on whether or not you are eligible for a home loan, and even whether or not you have full entitlement available. Contact us today to learn more about your options and make the most of your situation.