VA Loan Lower 620 Credit Scores Mortgage Guidelines

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VA Loan Lower 620 Credit Scores Mortgage Guidelines

This BLOG On VA Loan Lower 620 Credit Scores Mortgage Guidelines Was Written By Gustan Cho NMLS 873293 And UPDATED On January 15th, 2019

VA Loans is the best mortgage loan program available for home buyers.

  • However, VA Home Loans is only available to Veterans of the United States Armed Forces who have a valid Certificate Of Eligibility, commonly referred to as COE
  • There are no minimum credit score requirements on VA Loans
  • There are no maximum debt to income ratio caps on VA Mortgages

Borrowers can qualify for VA Loan Lower 620 Credit Scores at Gustan Cho Associates at Loan Cabin Inc.

Basics Of VA Loan Lower 620 Credit Scores Mortgage Guidelines

Here are the basics of VA Loans:

  • Only available to active and retired members of the United States Military with an honorable discharge and Certificate Of Eligibility (COE)
  • 100% financing
  • 100% Cash-Out Refinancing allowed on VA Mortgage Loans
  • There is no annual mortgage insurance premium on VA Loans
  • Department Of Veteran Affairs allows up to 4% sellers concessions by sellers towards veteran home buyers closing costs
  • If buyers is short of closing costs, lender can offer borrowers lender credit so veteran home buyer has zero money out of pocket for down payment and closing costs
  • There is an upfront VA Funding Fee on all VA Loans
  • However, Funding Fee on VA Loans can be rolled into the balance of the VA Loan
  • There is no minimum credit score requirement on VA Loans
  • However, 580 credit scores is recommended to get approve/eligible per Automated Underwriting System Approval
  • There are no debt to income ratio requirements on VA Loans
  • However, no more than 60% DTI is recommended for a AUS Automated Mortgage Approval
  • Outstanding Collections and Charge Off Accounts do not have to be paid to qualify for VA Loans
  • Veteran borrowers who have deferred student loans that are deferred for 12 or more months, the student loan payments are exempt from debt to income ratio calculations
  • The only type of co-borrowers allowed on VA Loans is the spouse of the veteran
  • Non-Occupant Co-Borrowers are not allowed on VA Loans like it is on FHA Loans

Do All VA Lenders Have The Same Requirements On VA Loans?

Not all VA Lenders have same mortgage requirements on VA Home Loans.

  • Most Lenders have lender overlays on VA Loans
  • VA Lender Overlays are additional VA lending guidelines that surpasses the minimum VA Loan Requirements set by the Department Of Veteran Affairs (VA)
  • Just because a borrower qualifies with one VA Lender does not mean that a veteran may qualify with another lender
  • Borrowers who have lower credit scores, higher debt to income ratios, outstanding collections, or other credit issues may want to seek a VA Lender With NO OVERLAYS on VA Loans like The Gustan Cho Team at Loan Cabin Inc.

Gustan Cho Associates at Loan Cabin Inc. is a direct Lender with no lender overlays not just on VA Loans but no overlays on all government and conventional loans. A large percentage of our borrowers close their VA Loan Lower 620 Credit Scores.

Typical VA Lender Overlays

Again, veteran home buyers can qualify for VA Loan Lower 620 Credit Scores. Buyers do not need 640 or 620 credit score to qualify.

Here are typical Lender Overlays on VA Loans set by many VA Mortgage Lenders:

  • Overlays On Credit Scores
  • Overlays On Debt To Income Ratio
  • Overlays On Outstanding Collections And Charge Off Accounts
  • Overlays On VA Loans During And After Chapter 13 Bankruptcy

What Are Credit Score Requirements To Qualify For VA Loans

Many borrowers are often confused by the fact that they are told of certain credit score requirements by lenders in qualify for VA Home Loans.

Veteran Borrower can VA Loan Lower 620 Credit Scores:

  • However, many if not most VA Lenders have Lender Overlays On VA Loans
  • What lender overlays are is additional VA Lending Requirements that is imposed by individual lenders that are above and beyond of those mandated by the U.S. Department of Veteran Affairs
  • VA also does not have a cap on debt to income ratio requirements
  • For example, I have many instances where veteran home buyers contact me after being told by a VA Lender that they need a 620 credit score to qualify for a VA Mortgage
  • The Gustan Cho Team at Loan Cabin Inc. has no overlays on VA Loans
  • I have gotten VA Loans approved with a 580 credit score and 60% debt to income ratio
  • VA only requires that the veteran borrower has an approve/eligible per Automated Underwriting System Findings and VA will insure the loan
  • There are lenders that have overlays on VA Loans on credit score requirements at 640 while most of them have overlays at 620
  • Many Lenders will have lender overlays on debt to income ratios on VA Loans
  • Many will cap it at 43% and some even will cap DTI on VA Loans at 41%

A large percentage of VA borrowers who come to us at The Gustan Cho Team at Loan Cabin Inc. has credit scores under 620.

Qualifying For VA Loans With Outstanding Collections And Charge Off Accounts

Veteran home buyers can qualify for VA Loans with outstanding collections and charge off accounts without having to pay them off.

  • However, many borrowers get turned down by other Mortgage Companies
  • This is due to having outstanding collections and charge off accounts
  • Again, VA does not have any requirements on having to satisfy outstanding collections and charge off accounts
  • Paying collections and/or charge offs is the particular lenders overlays and not those of the VA
  • The Gustan Cho Team at Loan Cabin Inc. is a direct lender and has no overlays on VA Loans

Home Buyers who are told that they need to pay off outstanding collections and charge offs by other lenders, please contact us.

Qualifying For FHA Loans During And After Chapter 13 Bankruptcy

Veteran Home Buyers can qualify for VA Loans during and after Chapter 13 Bankruptcy.

  • To qualify for VA Loans during Chapter 13 Bankruptcy Repayment Plan, they need to be 12 months into the repayment plan with no late payments
  • Trustee approval is required which most trustees will not have a problem and/or issue with signing it off
  • All VA Loans during Chapter 13 Bankruptcy Repayment Plan are VA Manual Underwriting

No Waiting Period After Chapter 13 Bankruptcy Discharged Date

There is no waiting period after Chapter 13 Bankruptcy discharged date to qualify for VA Loans. However, most lenders will require a two year waiting period to qualify for VA Home Loans after a Chapter 13 Bankruptcy discharged date.

  • No Waiting Period after Chapter 13 Bankruptcy discharged date to qualify for VA Loans
  • However, if the discharged date of the Chapter 13 Bankruptcy has not been seasoned two years, it needs to be a manual underwrite

A large percentage of our borrowers at The Gustan Cho Team at Loan Cabin Inc. are home buyers who are either on a Chapter 13 Bankruptcy or just recently had their Chapter 13 Bankruptcy discharged.

Qualifying For VA Loan With VA Lender With No Overlays

Veteran Home Buyers who need to qualify for a VA Loan with a direct VA Lender with no overlays, please contact The Gustan Cho Team at Loan Cabin at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. We are available 7 days a week, evenings, weekends, and holidays to our veteran home buyers needing to qualify for VA Loans.

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