Buying a home can cause a series of sleepless nights when you are far away from selecting the right loan program. If you are a veteran or active-duty service member, a VA loan is a perfect choice. Now, having spent years away from a regular life might affect your credit scores. You should apply for the best VA loans for bad credit in Fairfax County, VA if you think your credit score is below 600.
In this article, we mention all the information you must know about before choosing a VA loan.
Figuring out Your Current Situation
Credit scores leave a major influence on a lender’s decision as to whether they will accept your mortgage application or not. Of course, this is not the only aspect that holds the biggest significance, but it is still an important one. FICO or credit scores typically range from 300 to 850.
Higher credit scores indicate that you have a good credit history. In addition, excellent scores help you get a low-interest rate. Now, you should remember that the best rates are only reserved for high credit scores starting from 750. Keeping an eye on the credit report regularly is the best way to stay updated about your financial situation. In case your credit scores are in the mid-600s, you may have difficulties in getting a conventional loan.
When Your Credit Score is Below 600
When your credit score dips down to 600, you can make the best out of VA loans. The VA loan emerged when the Servicemen’s Readjustment Act passed in 1944. This was an act of widening benefits for eligible veterans. The VA loan guarantee program held an enormous amount of significance because of the less stringent credit score requirement and other loan benefits. The Department of Veterans Affairs insures or guarantees a part of the mortgage. Nevertheless, the VA is authorized to provide loans in particular areas for constructing and or buying a farm residence or home, or for home improvements.
Over the years, the program successfully helped more than 18 million veterans own a home. Recently, the VA expanded the list of eligible borrowers – the Reservists and National Guard personnel can also apply for the loan. However, the federal government still does not offer direct loans and insures the programs offered by private lenders. Remember, the Veterans Administration conducts an appraisal of the property.
In the end, the best VA loans for bad credit in Fairfax County, VA are not so difficult to get. Start the preparation as early as possible!
