I have been in the process of having a local company underwrite a loan through the VA. They said it was denied because the VA now requires a minimum credit score in effect, which is 620, mine is in the 580's. They said that they (the finance company) can swap it out of VA and into a subprime loan. If we do that they will approve me for $175,000.00, the types of products they offer are 30, 40 & 50 year loans with the first 2 years having a fixed interest rate and then the remaining term being an adjustable. They are actually designed just to get you into a house and then to refinance out of it on the third year. My first concern is the adjustable interest rate, I know too many home owners whose mortgage has gone through the roof because of adjustable interest rates. My second concern is that 175K wouldn’t buy anything in Northern CA, that amount is a slap in the face. Are we dead in the water and destine to continue paying over $1300.00 rent? This really took the wind out of our sails. When did VA set the FICO rule and I wonder why this finance company didn’t know, they stated they do VA loans all the time.
There is no minimum credit score requirements on VA loans. The company you were speaking to apparantly does not do VA loans at all and if they do, the loan officer knows nothing about them.
Not at all true. I just got someone with a 540 credit score approved for a $160,000. I guess you you just have to have the income to push the lower credit score. Is that right Paul?
FHA and VA both could care less about credit score, however, a good score is a compensating factor. The main thing is credit quality. In a nut shell having 3 tradelines that are 2 years old and no late payments. If you have no credit history at all then you can use things like your utility bills. I have gotten VA loans approved before based on the person pay history on their car insurance and their AOL account.
I'm currently on active duty for the National Guard. Am I eligible for a VA home loan? I read over the specifications but couldn't determine whether or not I would be able to get a loan.
Guard and reservists are different. If you were activated then you will have had to have completed the full period for which you were called to active duty. A reservist or guardsman who has never been called up will have to have completed 6 yrs in order to be eligible.
Being "eligible" for a VA loan only means that you are eligible for the VA entitlement. You still have to qualify based on income and credit.
Hi, i'm new to this post,I'm reading in all this and my case is i'm 30% service connected and have my cert. however everytime i go to a place to make a loan trhu va they tell me my credit score is too low and i wont be approved.I pay now 1,700 in rent and i think of it as a wasted money. My credit is very poor due to car repo and small revolving credits account.can anybody suggest anithing?I would appreciate.
Work to get your credit back in order. There is no alternative to that. Lenders are allowed to apply their credit standards. The VA guarantee is a method to reduce the requirement for a down payment.
I am not sure I worded the guarantee right - it takes the risk of default of loans with no down payment from the bank and transfers the largest portion of that to the VA. The bank (or other holder of the mortgage these days) still feels pain if you default - they have to foreclose, sell the house, collect from the VA, etc. Lenders do not like defaults.
The word guarantee can be replaced with the word insurance. VA insures 25% of the loan amount to the lender regardless if there is a downpayment or not.
How long ago was the auto repo and the credit card lates?
