VA Home Loans: You’re Eligible, But Do You Qualify?
Posted by: Ryan Dudley, Loan Officer, U.S Army Veteran (SGT.)
The benefits of the VA Home Loan Program are no secret. The allure of a zero-down payment option, no monthly mortgage insurance, and low interest rates draws veterans and their families in to take advantage of this program. Another attraction to this particular program is the forgiveness of blemishes on a borrower’s credit report when making an approval decision.
While the VA Home Loan Program does not have a set minimum credit score requirement, most advisers recommend a credit score of at least 620. Compare that FICO score to the required score for a conventional loan approval. According to mortgage software provider, Ellie Mae, the average FICO score for a conventional loan was about 755. The relaxed credit score requirements are approved in the confidence that the VA will guarantee the loan once the lender has funded the borrower.
Not only does the VA Home Loan Program offer easier standards looking at an acceptable FICO score, other flaws in a borrower’s credit history are also more easily forgiven. In most cases a foreclosure or bankruptcy will all but disqualify a borrower for obtaining a mortgage by conventional means. However, the VA loan program offers the borrower, with a proven time period of fiscal responsibility, the ability to qualify for a mortgage two years removed from the foreclosure. The same set of circumstances is in place for bankruptcies. VA loans allow for bankruptcies as long as two years has passed since discharge and adequate credit has been established.
No down payment, no mortgage insurance, low interest rates, and now relaxed credit standards? The VA Home Loan Program is making it easy for veterans and their families to qualify and get approval for the home of their dreams. If you’re a veteran and in need of a first mortgage or even a refinance, the VA Home Loan Program is your best bet in obtaining easy approval.