If you are a veteran who is looking to purchase a new home, it can be a stressful time. It’s difficult enough trying to settle into life as a civilian without having to worry about where you are going to live. Buying your own home can help to solve several problems you may have, including making it easier to find work as a civilian, because you have a fixed address.
There are several different aspects of VA loan eligibility. In order to know whether you are entitled you have to fill out an application, just as you do for any mortgage. There are also specific service requirements which apply in order for an individual to qualify. In addition to individual eligibility requirements, there are other facts that it’s useful to know if you are wondering whether you are eligible for a VA loan.
The effect of your credit score on a VA loan
One of the most important things to remember, when it comes to applying for a VA loan, is that your credit score will be taken into account. Although the scheme is a government creation, the loans are made by private lenders. They protect their interests in the same way that they do when they issue any mortgage. This means that they inspect individual credit scores before they make any decisions.
Decisions are made on an individual basis but most lenders require a credit score of 620 or higher for an application to be successful. This restricts the availability of VA loans for some people. However, the scheme is still a considerable benefit to most veterans. It allows for more affordable interest rates to be secured and means that purchasing private mortgage insurance (PMI) is not necessary. Both of these factors are financially advantageous if you are a veteran looking to buy property.
How much can you borrow?
As with other mortgages, you will only ever be able to borrow as much as you can afford to repay. You will need to provide information regarding your income when you make your application. In most states, the maximum value of a property you can buy is $453,100, if you want to benefit from 0% down payment. However, if you live in a state where property prices are exceptionally high, this maximum amount may be raised.
Ever since VA loans were introduced in the 1940s, they have continued to benefit veterans across the country. The need is as great today as it was decades ago. The restrictions imposed since the housing crash, and increasing interest rates, make it difficult for many people to afford to purchase their own home.
By applying for a VA loan, veterans can take advantage of a zero down payment. They also benefit from lower rates of interest and they have no requirement to purchase PMI. All of these factors put together make purchasing a home more affordable for ex service personnel, and provide an alternate financing option to secure a mortgage for a new home purchase.