VA Loans For Low Credit Scores

VA Loans and VA Loan Refinancing from VALoanMortgages

 

Low Credit? Bad Credit? Why A VA Loan Or VA Refinancing Can Still Be Yours!

One of the biggest benefits of using Veteran home loans is that the VA doesn’t set a minimum credit score. However, this doesn’t mean that the banks writing those loans don’t have one! At Capital Bank, N.A., we know you’re more than just a credit score. That’s why we look at a number of variables to determine your qualifications for Veteran home loans.

Credit Building Before Applying For VA Loans

If you don’t have any credit, it’s possible to build some before ever applying for a Veteran loan. This doesn’t have to mean that you should go rack up a lot of credit card debt! Get a major credit card, make a small purchase and pay it off each month.

Showing that you can use credit responsibly will help prove that you’re a good candidate for Veteran loans. If you do carry a balance, try to keep it under 30% of your available credit.

What If Your Credit Score Isn’t Great? Can You Still Get A Veteran Mortgage?

Your credit score is just one factor we use to determine your ability to repay Veteran mortgages. We look at more than just your credit score, including:

  • Repayment practices for the last 12 months
  • Past bankruptcies
  • Tax liens
  • Debts that were sent to collections

If you have ever had a bankruptcy, tax liens or debts that were sent to collections, we’ll look past those 12 months to see how long ago your financial difficulties were.

A negative blip on your credit report won’t automatically disqualify you from a VA mortgage or VA loan refinance. We want to help you with buying a home and achieving the American dream, so we’ll do everything possible to work with you and help you get the VA mortgage you’ve earned.

Rebuilding Your Credit

If you do have recent negatives on your credit report, it’s possible to fix them.

  • First, go through each obligation and make sure it’s reported correctly! It’s not uncommon for Veterans and service members to find errors on their credit report, especially if they move around a lot because of their military service.
  • If you do find errors, contact the creditors and the credit bureaus and ask them to remove the incorrect information, and don’t forget to follow up to ensure that it’s done.
  • If the negatives are accurate, work to make consistent payments for the next 12 months. This can help push down negative results and lenders will be able to see that you’re working to rebuild your credit.

Alternatives To A VA Loan

If you find that you don’t meet the VA loan eligibility requirements, we encourage you to apply for an FHA loan instead. Capital Bank, N.A. is an FHA-approved lender and we are expertly versed in the various types of FHA loans, so we know how to get you the best mortgage possible! One benefit of FHA loans is that they have a smaller down payment requirement than conventional home mortgages, which means they’re ideal for potential homeowners who don’t have the full 20% down payment saved.

Whether you’re looking for a new VA loan, an FHA loan or even a Veteran loan refinancing option, the knowledgeable and experienced Veteran mortgage professionals at Capital Bank, N.A. can help you. Fill out our simple VA loan prequalification form, and a local mortgage professional will call you to walk you through the process and answer any questions you have about your credit or other special circumstances.

Don’t assume that a low or poor credit score automatically disqualifies you from a Veteran home loan and owning the home of your dreams — contact us today and let us help get you into the home of your dreams!