VA Home Loans Credit Score Requirements Explained
You have a great opportunity to get a house you adore if you're a veteran or affiliated with a veteran. VA home loans can provide you with the opportunity to get the dwelling you've always wanted. You might be wondering about your qualifications, including the credit score you need to gain approval. We want to provide you with a little information about the credit score requirements and other criteria you'll need to meet to get approved for a VA home loan.
What is a VA Loan?
There are many types of mortgage loans consumers can get. The VA loan is a special type of mortgage that the Department of Veterans Affairs finances. The loans are meant to provide an easy way for veterans and their family members to find and secure affordable housing. The VA home loan program started in 1944. It was originally included in the GI Bill of Rights.
VA Home Loans Credit Score Requirements Explained
You must be 18 years of age or older to qualify for a VA home loan. You must also meet the income and credit requirements. The biggest qualifying factor is that you have to be a veteran or related to a veteran in some way.
The requirement for VA home loans is 181 months of active duty if you're now in service. You could qualify as a retired veteran if you served at least 181 days of active duty. You must have received an honorable discharge as well. You can also qualify if you worked in the reserves or National Guard. You must have served at least six years in such a position to qualify. There would be an exception for you if you were released from service for a disability resulting from your duties.
You can also qualify for a VA home loan if you are the spouse of a qualifying veteran or the widow of someone who died while on active duty. Furthermore, you can qualify if your veteran spouse is disabled or is currently a prisoner of war.
The Benefits of Getting a VA Loan?
Many benefits exist to getting a VA loan for housing. That's why so many people want to know the VA home loans credit score requirements. People who qualify for VA home loans can take advantage of many perks and rewards. For one, they can usually obtain housing without offering a down payment. That differs from most mortgage programs, which require people to put down payments of at least 3.5 percent of the price of the home. Therefore, a VA home loan will be great for you if you're working with limited funding.
VA loan recipients also get excused from having to purchase mortgage insurance. Mortgage insurance is required in most cases, and it can cost anywhere up to $4,000 a year, depending on the home and the mortgage company. Therefore, VA loan recipients get to save a lot of money on their home purchases. Furthermore, VA home loan borrowers don't get charged any prepayment fees. You can pay as much of your mortgage as you want to, and you won't have to experience a penalty or fee for it. You'll want to try to grab a VA loan if there's any way you can qualify for one. Keep reading to find out the VA home loans credit score and other factors that can qualify you for such an amazing mortgage deal.
What Can VA Home Loan Be Used for?
The good news about VA home loans is that you can use them for a variety of purposes. You know you can use them to purchase a home that will be your primary place of residence. However, you can also use them for home renovations or to refinance an existing mortgage. As long as you meet the requirements, you can perform any of the previously mentioned actions with your VA loan. You have a right to do that.
Credit Score Necessary for a VA Loan
All mortgage lenders use a system to decide whether to issue a mortgage to an applicant. The VA home loans credit score is a real thing as well. VA lenders like their applicants to have a credit score of at least 600 points. A 600-point score isn't bad, but it isn't exceptional either. It's fair. You'll need to get your score up to that point before you can enjoy the benefits of a VA loan.
It's okay if your score isn't that high right now. You can take some steps to improve it before you request a VA home loan. The first step is to grab hold of your credit score and report to see where you stand. That way, you can avoid going through the trouble of applying for mortgages before your profile is in good standing.
How to Improve Your Credit Score for a VA Loan
Now you know that the VA homes loans credit score requirement is at least 600 points. You might see that you need to improve your credit score to achieve the VA home loans credit score before applying for assistance. These are some tips that will help you to do that:
Stop Using Your Credit Cards
The first thing you need to do to reach the VA home loans credit score is to stop racking up the credit. Your credit score will drop every time you dig into your credit too much. On the contrary, it will rise as you repay your credit balances. Therefore, you can gain a few points by ceasing your credit usage and focusing on paying back some of your debt. That might give you the boost you need to reach an honorable level. Be sure to make your credit card payments on time to avoid getting hit with a ding on your credit report for late payment. You'll need to try to keep your score as high as humanly possible.
Order Your Free Credit Report
You're entitled to at least one free credit report per credit bureau annually. Therefore, you can order your credit reports now and not pay anything to receive them. You can order them online or by telephone. You can get the telephone number for the credit bureau on their website and contact them over the phone if you feel more comfortable. Either way, you'll have to verify yourself before they release a copy of your credit report. Once you're done with verification, you'll have your report in front of you in no time.
Clean Up Your Report
You can now clean up your report to qualify for VA home loans credit score. You need to look for inaccuracies about your address information, phone number, account information, balances, inquiries, and the like. You have the right to dispute any information that doesn't seem as if it belongs to you. The bureaus will be obligated to investigate it. Once they investigate it, they will decide whether the account information is valid or invalid. Any removal of an account that isn't yours will result in a bump in your credit score. That bump might help you get to reach the VA home loans credit score you desire.
Wait three Months
It usually takes about three months for credit scores to update after account removals, entire debt repayments, and the like. Make sure you wait at least that amount of time before you apply for your VA loan. That way, you'll have the highest score possible when you present your information to the Department of Veterans Affairs.
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Now you know what VA home loans credit score means and what you need to do to reach that credit score so that you can get home. You also know how valuable it is for you to qualify for a VA home loan. We hope this information will help you reach your goals as a new homeowner. Feel free to reach out to us with any additional questions or concerns you might have. Our job is to help you meet all your most critical personal finance needs. We are not a lender, but we can connect you to reputable lenders using various methods.
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