A VA loan is a specially designed home loan for military persons, available through a program established by the United States Department of Veterans Affairs. The VA puts the qualifying standards, dictates the term of the home loans offered and guarantees a part of the loan. However, it does not actually offer financing. VA home loans are offered by private lenders.
If your credit score is not good, you may keep thinking about how to get approval for a home loan program. Well, not to worry. Some lenders offer a VA home loan credit score 550 in Houston, TX. But you need to focus on some of the crucial things to ensure easy approval, including –
- Big down payment
Down payment plays an important role when you apply for a home loan program, and it is applicable for a VA loan program too. The higher the down payment you will come with, the lower you need to borrow from a lender. A lender might not approve your loan application for a hefty loan amount with a low credit score, but the mortgage lender will consider it when you come with a hefty down payment and want to borrow only a minimal amount. So, when your credit score is not up-to-the mark, you should try to save as much as possible for the down payment.
- Steady income
This is one of the vital factors, which will determine whether you can or can’t qualify for a VA home loan program. This home loan program will back up your loan if they are assured that you have a stable income and you can handle your debt properly. 2 years of consistent employment from the same employer is considered as a steady income. But in some situations where you don’t have 2 years of stable employment, your future income can be weighed up and used instead.
- Payment history
Another thing that can help you to qualify for a VA loan with a 550 credit score is your payment history. It is one of the most crucial things that a homebuyer can’t ignore. But this home loan program is more forgiving than a standard lender when considering this criterion. When you opt for this home loan program, you just need to ensure that you will punctual with each of your monthly payments.
- Shop for lenders
As it is already mentioned, the VA loans are not approved by the U.S. Department of Veterans Affairs, but by the VA lenders. And as there is no fixed guideline that the lenders need to be followed when approving the loan, the lenders set their requirements individually. So, the eligibility criteria vary from a lender to another one. Without comparing, it would be difficult for you to understand, who is asking for the lowest credit score. This is why; you need to ask for quotes from different lenders. Once you get the quotes, compare it, and then opt for the one that will be suitable for you.
So, consider the above-mentioned things and ensure easy approval of a low credit score VA home loan program.