VA Loans with Questionable Credit

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Woman concerned at computerIf you are a service member, Veteran, Reserve/National Guard member, or eligible surviving spouse, and you’re ready to buy a home, you may be concerned about whether you will qualify for a U.S. Department of Veterans Affairs (VA) guaranteed loan. Don’t listen to rumors – qualifying is probably going to be easier than you ever expected.

Since it was implemented in 1944, the VA Home Loan Program has allowed private lenders (mortgage companies and banks) to offer more favorable terms and reduce loan costs to veterans. The VA does this by guaranteeing a portion of each loan.

The program was originally designed to reduce the challenges faced by returning World War II vets, who often came home without credit, without savings for a down payment or closing costs, and without immediate prospects of a high-paying job. More than 20 million VA loans have been issued since then and the program has continued to evolve to meet the changing needs of the economy and the service community.

Individuals applying for VA loans often express the following concerns:

• We don’t have savings for a down payment.
• How do I find out my credit score?
• I’ve been working at my current job for less than two years.
• What if we have a Chapter 7 or Chapter 13 bankruptcy?
• I used the VA Loan program before; can I use it again?
• I’m receiving VA disability compensation; will that affect my VA Loan?
• Will I be able to afford my monthly payments?

The VA and your lender want you to be able to buy a home. The VA guaranteed loan program is not one-size-fits-all. Within the policies and guidelines, your loan officer will work closely with you and your personal financial circumstances to help you qualify and make sure you get the best terms possible.

This would be a great time to talk with a mortgage banker about your borrowing prospects. Visit our VA loans page or give us a call today.

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