The VA or Veterans Administration sponsors mortgage loan programs are the most versatile options for veterans, who want to buy a home. These flexible and zero down payment mortgages have helped millions of service members to become homeowners. And the most important thing is that you can avail this loan even with a bad credit score. So, if your credit score is as low as 550, then also you can get a VA loan and fulfill your dream.
However, if your credit score is low and you don’t have any knowledge about this loan program, you may like to know more, before opting for a VA home loan credit score 550. Here, take a look at some of the quick facts about VA loans.
VA loans are issued by participating lenders
People often believe that a VA loan program is that the Department of Veterans Affairs lends the money, sets as well as regulates interest rates on VA mortgage loans. But the reality is not so. If you want to apply for a VA mortgage loan program, you need to find a participating VA mortgage lender. The VA does not set interest rates on VA mortgages; it is the lenders who set it. The only requirement that is issued by the VA about the interest rate is that they should be “reasonable and customary” for similar non-VA transactions depending on market situations. So, if you want to get a loan with 550 credit score, you need to opt for a lender.
Down payment & VA loan
VA mortgage loan offers the borrower the ability to buy a home without any down payment. You should be financially qualified to get a zero-money-down VA mortgage loan. But if you have the marginal VA score, you may need to make a down payment as a “compensating factor”. Some borrowers prefer to pick a down payment even if they can choose no down payment option. It is because making a down payment can reduce the VA loan funding fee needed as a part of the transaction. Lender requirements vary in this area. Therefore, it is better to ask about the down payment from your lender before applying for a VA loan with a 550 credit score.
VA loans are only for owner-occupies
This loan program can only be used in order to buy a primary resident – a home that the buyer intends to live as their main address. Temporary duty, military deployments, and similar assignments are not considered as a violation of the owner-occupier rules. Because, it is understood that a military member can be sent to a war zone, sent to temporary duty elsewhere, deployed to another country, etc. Military members can purchase a house without residing in it as their primary residence as long as a qualified dependent occupies the property on their behalf. This exception to the VA loan property is only for immediate family members.
As you are now familiar with general facts about VA loan, without waiting any more, opt for a mortgage lender and apply for a VA loan to buy a house.