We are proud to serve the veterans and active-duty members of our armed forces that have served our country, and to assist this brave group of men and women to get into new homes, we will be posting a series of blogs to help them secure a VA loan. Part 1 was a basic introduction to the VA loan , and how it differs from a conventional loan . For Part 2, we discuss who can get a VA loan, and how your credit can impact your eligibility.
Am I Eligible for a VA Loan?
There’s a good chance you qualify to receive VA benefits if you meet at least one of the following conditions:
- You’ve served 90 consecutive days of active service during wartime
- You have 6+ years of service in the National Guard or Reserves
- You’re a U.S. citizen who has served in the armed forces of a government allied with the U.S. in World War II
- You’ve served 181 days of active service during peacetime
- You are the spouse of a servicemember who has died in the line of duty or because of a service-related disability
- You’ve served as a member in certain organizations (Public Health Service officers; cadets at the U.S. Military; etc.)
How credit impacts your eligibility for a loan
Credit history is one of the key factors that determine your eligibility for a VA loan. Typically, you’ll need to maintain a score of at least 620 before applying. However, if you happen to fall below that mark, we do have other options available for which you may qualify. Just remember: the better your credit score, the lower your interest rate. If you need help with improving your score, look at these six simple tips:
- Know your credit score. Your credit card company can often provide your score for free, or your bank should be able to for a small fee.
- Get rid of as much of your credit card debt as possible. Try to keep your credit utilization ratio down to around 30 percent
- Avoid worsening your credit during the application process. If you can avoid it, do not change jobs or make large purchases via credit, like financing a brand-new truck.
- Maintain steady employment . You must be able to hold and prove a reliable income, even if you’re self-employed. Your last two years of income should be at the same level or higher.
- Be diligent about paying your bills on time! Recent late payments can jeopardize your ability to qualify for a VA loan. We get it, you’re busy – set reminders or automatic payments to help stay organized.
- Have you had a recent foreclosure or bankruptcy? If so, you’ll typically need to wait at least two years from discharge/dismissal before applying for a VA loan (plus be able to demonstrate established credit following the foreclosure or bankruptcy). You may be eligible for a VA loan in the middle of Chapter 13 bankruptcy with at least 1 year of satisfactory payments made and approval of the trustee or bankruptcy judge.
Look for more VA Loan Home Buying Guide blogs in the future helping veterans and active-duty military get the home of their dreams. For more information on how you can secure a VA loan, contact a NASB VA approved lending officer at 1-844-334-4739 or visit here .
Download the complete free NASB eBook, Your American Dream Starts with a VA Home Loan