Many homebuyers shy away from VA loans due to the long list of restrictions. However, the process is not as difficult as they’d say. The restrictions are not wildly elaborate or numerous. Moreover, they should stay away from the misconceptions which only delay the process. For example, many would-be homeowners suspect that the credit score requirement is too crucial to pass. But did you know a veteran could grab the loan with a 550 credit score? Becoming a homeowner is indeed a rewarding experience, and such a lenient credit score requirement only eases the path.
The popularity of VA loans is booming for all good reasons. Unfortunately, a handful of people still end up making common mistakes. Many of them follow the guidelines of FHA loans and apply for the mortgage with a 500 credit score. Maintaining a 550 credit score is not unbelievably difficult if you regularly keep track of the credit report. Finding out an error in the credit report could give you the much-needed push at the last moment. VA home loan credit score 550 in Houston, TX is rather easy to qualify when you steer clear of the common mistakes. Of course, the Department of Veterans Affairs does not fix the credit score requirement. The lenders generally choose 550 as the lowest credit score. Unlike conventional loans, you do not have to worry about a brilliant credit score which often touches the mark of 620.
So, let’s have a look at the following tips and prepare in a better way.
Check Residual Income
The VA loan does not ask for a down payment, and everyone is aware of this benefit. Being one of the safest mortgages in the country, the loan has maintained its praiseworthy status for years. The standard for residual income was set considering its buyers; therefore, military buyers can choose affordable homes. The authority attempts to make sure that you have adequate money per month even after paying down monthly expenses. So, the residual income depends on family size and geographical location. The lender generally takes residual income into account after calculating the pre-approval sum.
Available only for Primary Residence
What type of occupancy are you looking for? This question is the answer to whether you can apply for a VA loan or not. The lenders typically allow primary residences; hence, a veteran cannot use the mortgage for vacation homes or rental properties. In addition to the context, you can rent out the property later on. Many military homebuyers buy a property and then move to a different location. Renting out the previous residence is possible when they receive PCS. Even if you have more than one VA loan active, it is still possible to rent the former property out.
It is better to start working with a local lender who has experience in offering VA home loans. They can further save you from the commonly made mistakes. Of course, remember to find a lender with whom you are comfortable throughout the loan process. So, find a professional lender now!
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.