Those veterans who are thinking to apply for a VA loan for low credit scores have landed at the right page because today we will be taking a detailed look at VA loans and how they work. So, read on for a crash course on VA loans for low credit scores.
Who Can Apply For The VA Loan?
The VA loan program is available for the following people:
- Active duty personnel
- Reserve members
- National Guards members
- Surviving spouses of the above
How May The VA Loan Be Used?
The VA loans for low credit scores may be used to:
- Purchase a house or condominium in a VA approved project
- Make improvements to a house
- Build a house
- Refinance an existing loan
- Purchase a manufactured home/lot
- Make the house more energy efficient by installing energy features
Credit Score Requirements
Although the Department of Veteran Affairs does not have a minimum credit score requirement, the VA lender, however, are not as forgiving and have set a criteria on which they base their approval decision. The following are the categories that are used by VA lenders to evaluate your credit score.
- Below 550 = Bad
- 550 – 649 = Poor
- 650 – 699 = Fair
- 700 – 749 = Good
- Above 750 = Excellent
VA Loan Benefits
Below are some of the ways a VA loan benefits the borrower:
- It is a reusable loan
- There is no down payment requirement
- The VA has Minimum property requirements
- Limited closing costs
- In a VA loan, you do not have to worry about paying mortgage insurance
- The Department of Veteran Affairs provides dedicated assistance to those veterans who are unable to repay their loan.
Joan Gallardo with his 18+ years of experience as Senior Loan Officer is a wealth of knowledge dealing with VA loans for low credit scores. Through his articles, learn about the different properties that can be mortgaged with a VA loan and the benefits it provides to homeowners, especially those with relatively low credit scores.