How hard is it to get a approved using the VA home loan if you have terrible credit, but a high enough income?

SPC Onel Cruz — Sun, 21 Apr 2019 21:59:52 -0400

I currently need to move by May 31st and I just applied for a loan with VA United Home Loans. Nobody has reached back so I have no idea what to do next. Is there any other means of getting a loan approved for a house if you have terrible credit? How long will this process take, any insight would be helpful.

Response by PO1 H Gene Lawrence made Apr 21 at 2019 10:03 PM

PO1 H Gene Lawrence — Sun, 21 Apr 2019 22:03:35 -0400

There are other VA home loan lenders you could check with. Good luck

Response by SFC George Smith made Apr 21 at 2019 10:09 PM

SFC George Smith — Sun, 21 Apr 2019 22:09:30 -0400

Contact them again … it used to take 45 to 90 days for approval... Most Interesting … Thanks for the share

Response by CAPT Kevin B. made Apr 21 at 2019 10:36 PM

CAPT Kevin B. — Sun, 21 Apr 2019 22:36:22 -0400

VA doesn't finance, lenders do. VA doesn't guarantee a loan, only the 20% delta downpayment piece you'd normally pay up front. The 80% is whatever risk the lender wants to take. VA has nothing to do with the 80%. VA doesn't trump credit issues. About the only thing is lenders tend to go more favorable to MILs because they know payday works like clockwork. Even if you do get approved, the interest rate will reflect the poor credit. That rate is an albatross around your neck. If the lending market goes well in 5-7 years AND your credit rating is worthwhile, then refinancing conventional is an option. I wound up doing that when interest rates dropped low twice. Both times I payed the same every month but took 4 years off the loan and put a new car in the garage.

Response by 1SG Private RallyPoint Member made Apr 21 at 2019 10:57 PM

1SG Private RallyPoint Member — Sun, 21 Apr 2019 22:57:17 -0400

Guaranteed, since the US Govt underwrites the loan.

Response by SGT Osmundo Thompson made Apr 22 at 2019 12:06 AM

SGT Osmundo Thompson — Mon, 22 Apr 2019 00:06:38 -0400

Most lenders will underwrite a VA loan with a credit score as low as 580. Just make sure that all your credit payments (Mortgage, car payment, credit card payments, etc.) are are in time for 12 consecutive months.

Response by CSM Darieus ZaGara made Apr 22 at 2019 5:20 AM

CSM Darieus ZaGara — Mon, 22 Apr 2019 05:20:59 -0400

It is the bank and not the VA that approved the loan. The VA only backs the loan. There are multiple banks that provide loans under the VA. Google VA home loans. From there it is a credit game. You will find one, keep digging.

Thank you for your service.

Response by SSgt Scott Posti made Apr 22 at 2019 7:39 AM

SSgt Scott Posti — Mon, 22 Apr 2019 07:39:47 -0400

You should check with several lenders. VA guarantees the loan which will help, but depending on your credit, you still need to be approved. Your lender should do most of the interaction and legwork with VA.

Response by SCPO Jason McLaughlin made Apr 22 at 2019 7:44 AM

SCPO Jason McLaughlin — Mon, 22 Apr 2019 07:44:22 -0400

Before you rush to buy a home, I would get with a financial counselor to make sure that a home purchase is right for you. Owning a home is no joke, and someone with terrible credit may not be in a position to make the biggest purchase someone makes in their lifetime. Perhaps you should look into renting.

Response by SFC Private RallyPoint Member made Apr 22 at 2019 8:45 AM

SFC Private RallyPoint Member — Mon, 22 Apr 2019 08:45:03 -0400

Check back with them. Also look into FHA loans.

Response by LTC Jason Mackay made Apr 22 at 2019 10:19 AM

LTC Jason Mackay — Mon, 22 Apr 2019 10:19:14 -0400

The VA underwrites a home loan when you use a VA loan so you don't have to have a down payment. Commercial lenders are actually loaning you the money. You download the VA document you need by going to the eBenefits site that confirms your eligibility as a veteran.

If you went to one company and they have nothing for you, go to another one.

Response by SFC Casey O'Mally made Apr 22 at 2019 3:40 PM

SFC Casey O'Mally — Mon, 22 Apr 2019 15:40:24 -0400

If you have terrible credit, don't do it!!!!!
Rent for a year and get your credit up. Even with a VA backed loan (provided you can get one) your interest rate will be stupid high due to your poor credit. Take a year of renting (builds credit). Try to find a place which has low rent but includes no utilities. This gives you more bills with the same overall cost. It is a little bit more work, but hopefully you can get everything on an auto-pay to make sure payments are made on time. The more bills you have, up-to-date and current, with a history of on time payments, the better your credit is. Spend a year paying rent, gas, electric, water, and trash, plus your other bills like car, insurance, and credit cars - all on time. Your credit will improve drastically and THEN you get a loan with a much lower rate - probably as much as a full percent, which doesn't sound like much, but over the course of a 30 year mortgage, it more than adds up to what you spent renting.

(USUALLY. Sit down with a financial advisor to run the numbers - you should be able to find one for free on post. Army has them at Army Community Services (ACS), not sure what the Marine equivalent is.)

Same holds true for car loans. Drive the beater until it dies while A) saving for a big down payment (or paying 100% cash) and B) improving credit to reduce future loan percentage. Even then, you almost never finance directly with the lot. (Just like you probably don't want to finance directly with a seller for your house.)

Response by SGT Thomas Seward made Apr 22 at 2019 5:00 PM

SGT Thomas Seward — Mon, 22 Apr 2019 17:00:38 -0400

You need to be working with a VA home loan specialist. Most real estate agents will know of one that can help. They’ll know what to do.

Response by SFC Private RallyPoint Member made Apr 22 at 2019 7:45 PM

SFC Private RallyPoint Member — Mon, 22 Apr 2019 19:45:14 -0400

620 is the number they generally look for. With that being said. Sometimes there is wiggle room. I have decent, not great credit and was approved in just a few minutes so I’d say it’s worth a shot to try if you are considering a purchase. Additionally, most VA loan services will tell you why you didn’t qualify and offer you tips or services to get you there.

Response by Sgt Gus Laskaris made Apr 23 at 2019 4:17 AM

Sgt Gus Laskaris — Tue, 23 Apr 2019 04:17:42 -0400

VA home loans are relatively easy to get...but credit score is important and income alone won't get you over. I have a good credit score and a good income but because I am self-employed it was like pulling teeth so I eventually gave up and went with a traditional lender.

In my opinion, the VA is looking for "normal" veterans with decent credit, a steady job for which they can show pay stubs, and no complicating factors.

Response by SrA Marianne Santangelo made Apr 27 at 2019 2:51 PM

SrA Marianne Santangelo — Sat, 27 Apr 2019 14:51:46 -0400

I am in same situation