Started in 1944, the Department of Veterans Affairs declared its twenty-one-millionth home mortgage recently. The VA loan program was launched in the gratitude for the military service members returning from World War II. Now, the veterans and their spouses can proceed with the application. After spending years away from home, the war veterans may be down with financial matters. In order to get away from the financial woes, the contribution of VA loan is hard to overlook. For example, such home mortgage does not ask for a down payment. So, what could be more cost-saving than this?
Also, service members with disability can qualify for the waiver of the funding fee. This lowers the closing costs as funding fee is already financed. There are low-interest rates ranging from 0.5% to 1%; hence, the rates are unbelievably lower than the traditional income loans. On top of it, the VA home loan borrowers can pay off the mortgage when they choose. However, there are many benefits about the VA Home Loan bad credit that you may not get. The reason for the rejection is your poor credit. Yes, when your credit score is lower than 500, you may be in trouble to use all these benefits and build your dream house.
Of course, there is a solution to repair credit history. Let’s go through the steps that can improve your credit score easily.
Check Your Finances
When you are making a financial decision, go through it over again and again. Is it going to leave a severe impact on your credit history? If you can make the right choice, you can cope with the current financial situation. Start to assess the financial plans for the last six to twelve months. Then check which financial habits are dampening your strength and taking your credit history downhill. When you find all the triggers, you can direct the financial plan to the right path.
Know Your Credit Score
In the process of checking the financial plan, you need to review your credit score as well. FICO runs an algorithm that is dependent on five factors – payment history, length of credit, credit inquiries, types of credit, and available credit. Among these factors, the payment history gives the major blow. When the payments are overdue for 30 days, 60 days, and 90 days, the score starts to drop.
Limit the Number of Inquiries
When you are opening new credit, it can multiply the number of the entire credit limit. This move leads to a hard inquiry on the credit report. When there are way too many hard inquiries, this can leave a negative impact on the credit score. However, this effect may pass over a certain period. In any case, hard inquiries generally remain on the report for 24 months.
Professional lenders can find easy ways that can repair your credit history. Usually, when the score ranges from 300 to 499, things seem difficult for the customers. Hence, the convenient ways guided by the professionals can push you one step toward building your primary residence for the first time.
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.