How Hard Is It to Get a VA Loan?
Lenders have increased creditworthiness requirements after the 2008 mortgage crisis. If your credit score falls below a certain level, it’s becoming more difficult to get a VA loan. According to a Washington Post article, the average credit score for a VA loan is 708. While that is not as high as the Fannie Mae average of 750, it is higher than the 600s approved between 2008 and 2010.
A VA loan requires a minimum credit score
There are some things you can do to improve credit if you’re considering applying for a VA loan. A good credit score is essential. However, even if your credit score is less than 620 you may still be eligible for a mortgage. You should work with your lender to improve your score, as making bad decisions can hurt your chances of getting approved for a loan. Do not apply for credit cards again, buy a new vehicle, or open a line of credit.
A VA loan is a great financial perk for returning, active, and associated service members. Often, the rates on these loans are low and the options are many. You can refinance existing equity and even buy a house with no money down. The VA does not set a minimum credit score for VA loans. It is possible to get approved for a VA loan without having perfect credit. There are many VA-approved lenders.
Processing time for a VA Loan
The processing time for a VA loan can vary, but it is typically faster than other mortgages. During this time, the VA will issue you a Certificate Of Eligibility. Because it removes much of the uncertainty from the loan application process, it is important that you obtain the COE. Typically, processing time takes anywhere from four to six weeks. This service costs the lender approximately 1% of the loan amount.
Another factor that can affect the processing times for VA loans is whether the veteran qualifies for a loan. Some veterans do not have problems qualifying for a VA loan, and lenders must adhere to extra requirements. While this can cause a delay, the average time is the same as a conventional mortgage. These are the main characteristics for closing a VA loan. Once you are familiar with the general timeline, it is time to start the application process.
Closing costs of a VA loan
Sellers may agree to pay a portion of the closing costs for VA loan buyers. In some cases, sellers are willing to contribute up to 4 percent of the mortgage amount as closing costs. Lenders may offer a $6,000 loan credit to help with closing costs. Other expenses include the real estate agent’s commission, brokerage fees, and termite report. VA loan borrowers are exempt from paying points. These points lower the interest rate but are not part of the loan amount.
The VA guarantees lenders that VA loans will be approved. This makes VA loans more attractive for buyers. VA does not require lenders approval. As long as you meet income requirements, closing costs such as discount points and commissions for real estate agents can be financed. Moreover, VA has rules and regulations about the costs that the buyer must pay himself. A VA loan allows the buyer to avoid paying real estate agent commissions or attorney’s fees by purchasing a home.