Did you know VA loans have a no-down-payment option? Every mortgage demands to put down a particular percentage of the loan amount. This benefit leads to no mortgage insurance so that you can save a lot in the future. Besides proving your eligibility to the lender, you need to prove eligibility. Make sure you have at least 550 credit scores for VA loans!
In Houston, the VA-approved lenders need to run an appraisal before the pre-approval. So you can guess that it takes more than one thing to get the green signal from the lenders. Your working history is not the one thing to offer the acceptance letter. Yes, it is the credit score that you should check frequently. Typically, lenders ask for 550 credit scores from the veterans or active-duty service members. Let’s find out everything you need to know about the VA home loan credit score 550 in Houston, TX.
VA lenders evaluate the credit score
The lenders used the credit report to check your financial condition when they did not review the credit scores. A credit report draws a practical picture of your current debt and late payments. The lender often checks whether the buyer has missed more than two payments – this can be fatal and lead to rejection. FICO focuses on complex analysis for predicting the future of your financial condition. Your FICO score must be between 300 and 850, but the higher scores fetch better interests. The Department of Veterans Affairs does not choose a minimum score, but the VA-approved lender is responsible for it. Unlike the conventional mortgage, the VA loans have affordable scores around 500 or 550.
VA mortgage minimum FICO score requirements
VA loan up to 100% is available for single-family and multi-unit residences. When your FICO score is higher than 550, you can easily get the approval. Remember, VA loan approval does not end at meeting the credit score requirement. You can get approved for less than 550, only if you pass other eligibility requirements. Those who face trouble in getting approved may opt for manual underwriting. The underwriters and VA lenders check whether the buyer is confident in paying the debts back on-the-dot. Getting approval for the VA loan is not shocking. It does not become a major hindrance on the way, either. The manual underwriting involves alternative credit references.
Improve credit score if you had bankruptcies and foreclosures
Foreclosures and bankruptcies are the reasons behind poor credit scores. VA loans are available for those who have had a history of any of it. Usually, there is a waiting period of two years included for foreclosure. For bankruptcy, the period is more or less the same. Utilize the waiting period to get back on your feet and meet the lowest credit requirement. Meanwhile, work on clearing the debt and do not be responsible for another late payment. Paying bills for mobile phones or utilities can help on the way to repair the damage.
While navigating your way through the VA loan with low credit scores, ask the lender when in doubt.