HOW TO GET A FLORIDA VA MORTGAGE WITH BAD CREDIT
Contrary to what many bad credit Florida mortgage applicants my think the VA mortgage is easy to qualify for if you have:
1) You have no outstanding collections.
2) No outstanding judgments,
3) Stable income,
4) a median credit score of 580 or higher.
This is because VA loans were designed to be a benefit to the borrower.
The VA Mortgage program was created in 1944 as a thank you for Florida service personnel returning from World War II. This Florida mortgage guarantee is designed to make buying a Florida home easy, affordable, and safe.
The “easy” part of the design is to make the VA mortgage accessible to borrowers with less than perfect credit.
One of the main purposes of the VA Mortgage loan was to cut the common hassles of obtaining a Florida home loan such as good credit, down-payment, and closing costs.
Many Florida bad credit veterans who have spent time overseas lack positive credit. Other Florida VA home loan buyers lack the required funds for a down-payment. To reverse this, the government found that one of the best way to assist veterans after their completed service was to help them get a farm or a home.
A few changes have occurred over the years, including an increase in the amount veterans may borrow and the ability for active duty to apply to get a VA mortgage loan.
The maximum $0 down Florida VA mortgage loan limit currently varies between $417,000 to over $625,000 depending on what Florida county you plan to buy a home in.
The VA mortgage loan Program gives Florida mortgage lenders the assurance that the VA loan will be paid for and gives veterans the support needed to obtain a Florida VA loan.
The credit needed to obtain Florida VA mortgage loan is determined by a few key factors. The most important of those are satisfactory housing payment history, and present and/or anticipated future income. This means that your income needs to be stable and predictable and enough to cover all future bills, give you enough disposable income to meet the VA mortgage loan minimum standards for cost of living plus the additional VA mortgage payment.
Stable predicable income is equivalent to 24 months of consistent employment. If the time of employment is less than this, the VA loan underwriter will have to evaluate the probability of your future employment. In most areas, the FICO Credit Score must be a minimum 580..
However, there are VA loans for some borrowers who have no credit score or even a score less than 620. If you are without credit, qualification is determined based on past payment history of rent, car insurance and other regular monthly expenses.
To be deemed as a loan applicant with satisfactory credit a number of factors will be analyzed. Over the past year, you may not have made any 30day late payments reflected on your credit report. If there are any unpaid or untimely debts, your credit may be deemed unsatisfactory.
Late payments however, will not result in an automatic VA loan denial. If you have a special circumstance, this rule can be forgiven. If you have any open collection accounts you may still be considered as eligible, as long as there is a timely payment plan in place for the last 12 months. If you are participating in a Consumer Credit Counseling program or are in a Chapter 13 bankruptcy, in lieu of negative credit ratings, this actually can be a positive determining factor. The important thing is that you are currently on a regular, consistent payment schedule, and those payments are being made on time.
In regards to a Chapter 7 bankruptcy, if it has been over a full (2) two years since the bankruptcy was discharged or forgiven, the bankruptcy will not play a factor in determining satisfactory VA credit.
As mentioned before, a Chapter 13 does not have to be discharged, and you may still qualify even in Chapter 13 bankruptcy, as long as you repaying your debt as agreed and can prove 12 month timely payment history.
Also, it will not count against you if you filed bankruptcy due to circumstances out of your control (such as a medical issue not covered by insurance).
Lastly, it’s not a negative factor if bankruptcy was filed due to a failed self-employed business venture if the borrower has regained employment, and there is no derogatory credit information since then or prior to self-employment.
Finally, to ensure acceptable credit, you can’t have too many inquiries on your credit report. In doing so, the credit rating drops dramatically. In addition to the low score, multiple credit inquires can look like new credit lines and this can affect your ability to repay the debt. Because of this, multiple credit inquires can cause delays in your loan approval.
The last thing you need to know to get a VA loan, you need to be sure there aren’t any savings or checking overdraft fees. If you are a veteran in the market for buying a house, take the time to fill out a Florida VA mortgage application. Florida-Mortgage-Lenders.com is here to help you learn all you want to know about the VA loan process.