VA Home Loans Bad Credit

Many military personnel who live in different parts of the world have difficulty at times making sure that their bills are paid on time. Another problem that military personnel have even if they are stationed close to home is that their credit score never becomes good because of their inability to build a credit history.

Many of these servicemen wonder if they will be eligible for home financing due to their VA home loans bad credit rating. They are concerned about obtaining a VA loan. This is a major concern because most families have a desire to own their own home. Do these servicemen have a legitimate concern about their VA home loans bad credit rating?

It should be stated that the Veterans Affairs this not require any of its borrowers to have the minimum credit score. What they do require, is that the borrower can prove his eligibility. This can easily be done with a VA certificate. All loans that are made available to veterans and servicemen are guaranteed by the Department of Veterans Affairs.

In essence, this means that the Department of Veterans Affairs will guarantee the loan even if a servicemen does not have a previous credit history. They will also allow a serviceman to take a loan if he has a previous history of bankruptcy or foreclosure. The VA will charge the borrower a fee for this service. However, the fee can be included into the loan amount.

All lending institutions who loan money require a minimum credit score for a loan applicant. There are certain banks and lenders who will approve a mortgage from Veteran’s Affairs with a low credit score of 600. The majority though require a score of 620 are better. Today, most underwriters use an automated system that requires a lender and the VA to meet all guidelines.

The lending institutions and Veterans Affair realize that there are extenuating circumstances with these type of loans because of serviceman being stationed abroad. Therefore, most of these automated underwriting systems are manually reviewed by the Veterans Affair. This consideration helps these extenuating circumstances be taken into consideration.

As mentioned earlier, the VA will even guarantee your home loan you have had a previous foreclosure or bankruptcy attached to your credit history. There is however a seasoning period of time that will be required. If you have had such a negative credit event occur within the last two years you will not be approved by any lending institution or by Veterans Affair.

However, the good news is that you can obtain a home loan from VA even if you have a low credit score. If they prove that you have been careless in handling past debts, they will not approve you. You still may receive a VA loan in the future but you will have to wait for a period of time. During that time he may be required to pay off specific collections, judgments, or liens. Never give up on trying to get a home loan because every family deserves its own home.