Many people assume that if they have poor credit, they will have difficulty obtaining reasonable terms and interest rates because they will not be eligible for many types of loans. But, there are different types of financing available to applicants who have less-than-perfect credit and lenders willing to give them a second chance. VA loans are one such type of financing specifically available to veterans and men and women currently serving in the military or the Reserves.

These Loans Have Lenient Eligibility Requirements

To qualify for a VA loan, applicants do not need to have significant income or high credit scores. These loans, which are guaranteed by the Department of Veteran Affairs, are more forgiving of an applicant’s credit history than other types of home loans and are easier to obtain, as long as the applicant meets other credit and income requirements. These requirements include one year with no delinquent payments and meeting a minimum residual income requirement, as well as a maximum debt-to-income ratio. Most lenders will also require that applicants have a credit score of at least 620.

VA Loans Offer Benefits, Regardless of Bad Credit History

While many conventional loans base loan terms, such as rates, on the applicant’s credit scores and other factors, VA loans do not. These loans offer low rates regardless of the applicant’s credit score. Because the VA guarantees these loans, lenders consider them to be low risk. If a borrower defaults on his or her loan, the VA will help ensure that the lender does not suffer any monetary loss. Securing a VA loan with a low rate will ensure that the borrower has more money available each month for other expenses and will save a large amount money over the life of the loan!

VA loans offer other benefits to borrowers, as well. Even with bad credit, a borrower can still take advantage of having no down payment (which is great for first-time home buyers) and no mortgage insurance! Cialis Jelly This leaves borrowers with more money that they can use toward their monthly mortgage payments. This is important because making mortgage payments on time will help rebuild one’s credit.

Refinance with this Loan to Consolidate Debt and Erase Bad Credit!

Homeowners who already have VA loans can easily refinance their current mortgages to change the terms of their loan. Homeowners can refinance to a lower interest rate and lower their mortgage payments in order to save more money every month. The homeowner can also consolidate some or all of his or her debt into one payment in order to make the process of paying off debt more efficient. Consolidating debt can also save the homeowner thousands of dollars in interest!

VA Loans Can Make Homeownership a Reality, Despite Past Circumstances

Having bad credit does not have to prevent an applicant from becoming a homeowner. An applicant who meets the aforementioned requirements can still be eligible for a VA loan and can thus make his or her dreams of owning a home come true. A knowledgeable loan specialist can help an applicant determine if he or she can still receive financing despite having a troubled credit history.

Author Bio: Victoria Belle-Miller is the newest member of the VeteransLoans.com writing staff. Her background in journalistic writing and ability to evaluate the issues that Americans face in daily life make her a strong addition to the VA loans team and a valuable source of sound mortgage advice.

Category: Finances
Keywords: VA loans, bad credit, mortgages, veterans, soldier loans, active duty military, no down payment