Bad Credit? You Can Still Get a VA Loan
When you buy a house with a traditional mortgage, the lender will ask you to prove your financial worthiness. In most cases, this means taking a long, hard look at your credit score. The higher your score is, the easier it will be to get a mortgage. But what if you’re applying for VA loans in Colorado Springs? While you still need to show that you can afford to make monthly payments on the house, you don’t have to have perfect credit to qualify for the loan.
The VA Guarantees the Loan
When you’re considering buying a house with a VA loan, your personal finances aren’t the only thing that guarantees the loan. The government backs the loan for you. This means the lender will get at least some type of payment for the house if you end up defaulting on the loan. The guarantee makes it more tempting for lenders to extend loans to veterans who may not otherwise qualify for a home loan.
Your Score Isn’t the Deciding Factor
When you first start shopping for VA loans in Colorado Springs, your credit score will still play a part in how much of a house you can afford to buy. It just won’t be the deciding factor. With traditional mortgages, there is often a minimum credit score you’re expected to have. If your score is lower than that, the lender won’t offer you a loan.
VA loans are much more forgiving. There are no minimum credit score requirements to satisfy. Instead, lenders tend to place value on your rental history and your available income. The more proof you have that you’re able to make monthly payments and the more stable your income is, the more likely the lender will be to give you a great veteran home loan.
If you do have bad credit, the lender may end up offering you a smaller loan. This can keep you from being able to buy the house of your dreams, but it shouldn’t keep you from being able to buy a place to call your own.
You Can Always Improve Your Score
If you have bad credit, you can always take steps to improve things. Start by paying down your existing debts as quickly as you can. Pay your utility bills on time and avoid taking out new loans or opening new credit cards. These can end up lowering your score and increasing your overall debt level.
Once your score goes up, apply for VA loans in Colorado Springs. The higher your score is, the easier it will be to qualify for a larger loan.
Always Work with an Expert
VA loans in Colorado Springs work similarly to traditional mortgages—they’ll help you buy a house—but they work in different ways. The qualifications and paperwork you need to fill out can be confusing. Instead of talking to a traditional lender, work with a mortgage expert who understands the nuances of VA home loans. Contact us today to discuss your options and get into the home of your dreams.