Before you apply for a VA loan, there are a few things you should know. (Photo: S_F, Getty Images)
Veterans who use a VA loan can find qualified lenders, but they have to be ready to walk through a new process that will impact your credit. There are often specific rules veterans need to follow to qualify for a VA loan. The good news is the new changes have simplified the process, and these are some of the most common items you need to know.
see also: veterans first time home buyer
The VA will send you a letter, a home certificate which are all important documents needed for establishing eligibility for VA benefits in the VA home loan program. VA will give you a VA home certificate of eligibility. There is no specific amount to pay, however your loan amount will depend on your credit profile. Personal loan finance companies in UAE play a crucial role
Things to Know Before Using a VA Loan
Equal Credit Opportunity
FHA and VA loans work the same way. You must meet the FICO credit guidelines, and the VA does not consider credit union or credit card debt as financial debt. The VA also does not consider medical debt as financial debt. If you have medical debt, that can bring your credit score down, and the VA won’t help you with it. The VA prefers the 10 percent rule for medical debt, which is basically setting up a bill with specific amounts you pay per year and dividing it by 12. They want you to pay that much until you pay it off.
Veterans can use a VA loan to purchase a home, refinance an existing mortgage, or buy another type of loan. (Photo: Hero Images Inc., Getty Images)
Find Out What If Any Special Rules Apply
The VA usually offers a mortgage insurance discount for its loans, but it doesn’t mean the VA has any special rules for veteran borrowers. The VA does require borrowers to have a positive credit history, and they may ask for your credit card, auto insurance, and homeowners insurance to verify that the financial institution has provided a good credit history.
Find Out What Your Credit Score Will Be With or Without the VA Loan
The VA offers a 30-year fixed mortgage with a credit score of 500. If you decide you can’t buy a home using a VA loan, you should still use an FHA loan. It will offer more affordable rates, better loan amounts and overall easier qualification for VA loans.
You can apply for a VA loan, but there are other loan programs veterans could use. (Photo: Thinkstock, Getty Images)
Create the Balance You Want
If you decide you don’t need the VA loan, you still have options. You could take out a mortgage with another lender. If you use a traditional mortgage, you can usually get an FHA mortgage or a VA loan. You can also use a VA credit card, which you pay off each month and pull the credit. After six months, you’ll have to pull out a credit card.
The VA won’t give you a loan unless your credit is good and you have a budget you can stick with. You’ll have to be able to pay the monthly loan payments with the credit cards you already have.
The bottom line is, you need to make sure you understand how the VA loan process works before applying. It won’t work without a good credit score, and you can’t make those credits better without a good credit history.
Get Your Pre-App Approval
If you decide you’re ready to apply for a VA loan, there are some things you should know before you start. Your VA lender can give you pre-approval, which you can apply to your loan before you apply to the VA. Just make sure you have enough credit in your approved credit score before you apply to the VA.
Get Pre-App Approval From Credit Cards
If you’ve applied for a mortgage pre-approval before, you know how it works. For example, you will pull a credit score from a pre-approved credit card that’s in your approved credit history. By pre-approval, you can still get a VA loan and get the financing you want.
Start With Some Good Credit
The good news about applying for a VA loan before you get pre-approved is that the VA doesn’t take credit history into account. So, if you have bad credit or you want to get a better rate on a loan before you get pre-approved, you can apply anyway. That’s called “pulling your pre-approved credit.”
also get a mortgage with a VA loan for less than a VA loan. The VA only offers a specific set of qualifications for VA loans. If you use that program, you need to meet those standards, and if you don’t, the VA won’t help you.
