If you are a retired or an active military service member, there are many things to celebrate. Yes, VA home loan is definitely one of them. The Veterans Affairs offers the much-needed financial support to the eligible borrowers. They need to prove that they have decent credit scores and the sufficient mark is 550. The lender checks the credit score during the mortgage application process. However, you should remember that better scores bring along better rates and terms at the same time. Of course, the low credit does not obstruct a VA loan application. Moreover, the borrower can benefit out of the zero down payment also.
The U.S. Department of Veterans Affairs does not fix particular credit requirements but the lenders do. Therefore, the credit score requirements can vary as per the lender and the range can be 500, 500, or 580. After all, the lender decides the percentage he/she wants to offer to every individual. Of course, the lenders ensure the best rates to the borrowers with brilliant credit scores. As you are about to choose the VA home loan credit score 550 in Houston, TX, you should remember particular things too. So, go through the rest of the article to find out more.
See how Credit Score Affects VA Loans
The credit score impacts on the VA loan and you should remember that. The house loan rate is the same for every borrower and there are several things factor in. Besides down payment and debt-to-income ratio, the credit score is one of the vital factors affecting the VA loan rate. When the credit score and down payment amount are high, the interest rate goes down. A lower down payment might be the reason behind the higher interest rate also. However, you can see a significant change for the VA loan rates. The interest rates are consistently lower than other types of mortgages with a low down payment. If you are unable to make a large down payment, you can only maintain healthy loan rates.
Applying for a VA Loan with only Low Credit Scores
VA homebuyers who have credit scores lower than 550 must find a way to qualify for the mortgage. Therefore, you should work towards improving the credit scores. When your credit score goes down, you should take out time to improve it. If you can keep it at 550, you are in luck. Also, beware of the actions that can pull down your credit scores. If you are processing the loan application, a sudden investment might be a bad decision. If you are wondering how to improve the score, you should start paying the bills on time. In addition to the context, you should avoid closing unused credit cards.
If you wish to choose the VA loan, you should discuss with a lender. Only the professional lenders can guide and inform you what rates are suitable considering the credit score. If you improve the credit score, the lender can walk you through the lowest or best mortgage rates.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.