For former military personnel, the challenge of adjusting to civilian life can be quite acute. It’s a common thing to see those who left the military, either because their tour ended, they had a disability, or simply they decided to retire, fight . But when buying a home, the availability of VA home loans with bad credit means there is a financing option available to them.
The Army holds a special place in the loan industry, with a variety of incentives offered to current and former members seeking loan funds for any reason. But getting approved for a VA mortgage depends on more than just joining.
So what are the criteria needed to get approved for a VA home loan? What can you do to increase your chances and where can you secure them from? Here are some factors that answer these questions.
VA Funding Eligibility
Those eligible for VA funding are former members of the military. But that doesn’t mean a former member will get the green light. Securing a VA home loan with bad credit comes down to meeting 3 key conditions.
Since those seeking approval for a VA mortgage often have incomes that are unrelated to the military, chances are they have had bad financial experiences. The VA wants to ensure that it does not bear major financial risk.
Therefore, applicants cannot have defaulted on a loan in the previous year, cannot have any bankruptcies recorded in the previous 2 years, and must have proof of gainful employment. Once these criteria are met, a VA home loan is an option.
other considerations
The definition of ex-military isn’t as clear cut as it sounds, with those unable to serve due to a disability included in the group — at least by the VA. As a result, people who are currently disabled or receiving benefits can apply for a VA home loan with bad credit.
As with any other loan, taking steps to improve your credit scores (even slightly) can make a huge difference in your chances of getting a VA-approved mortgage. The best way to do this is to clear some existing debt, or at least get up to date on credit cards and other bills. It can be interesting to take out small personal loans to meet individual debts.
The advantage when looking for a VA home loan is that with each debt paid off, the credit rating increases and the debt to income ratio improves. The ratio is the key factor in any loan application. Get this right and approval is almost guaranteed.
Where to Get a VA Home Loan
Despite the title of the loan product, a VA home loan is not actually granted by the VA. They only provide support to the applicant, while the mortgage lender provides the financing. For this reason, it is necessary to find a suitable online lender to obtain the best possible conditions.
However, the fact that the VA is willing to sponsor the applicant means that the guaranteed terms can be very good, especially because the interest rates are lower. But getting a VA home loan with bad credit usually means no down payment is needed, and the VA also guarantees 25% of the mortgage.
With a reduced level of risk, lenders are happy to grant the mortgage. Nevertheless, look for VA certified home loan providers. They are trusted VA partners, which reduces the risk of being taken advantage of and provides a higher likelihood of VA mortgage approval.
By Marc Venite
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