In this article, we will cover getting approved for VA loans in New Mexico. Are you an active duty military service member or a veteran looking to purchase a home in New Mexico either for yourself or your family? If so, have you heard about VA loans and that you can apply and qualify despite having a bad credit history and not having to pay down payments?
Today, in this article, we will tell you more about VA home loans in New Mexico. We will cover getting approved for VA loans in New Mexico with great credit, mediocre credit, bad credit, and no credit. The team at Gustan Cho Associates will offer tips on how you can purchase a home using VA loans and other mortgage loan options.
Facts About The State of New Mexico For Homebuyers
In this section, we will be discussing some facts about the state of New Mexico.
New Mexico is a U.S state found in the Southwestern part of the country, bordered by Colorado in the north, Arizona in the west, Texas and Oklahoma in the east, and Mexico in the south. In the northwest.
What Is New Mexico Known For?
New Mexico touches three other states, including Colorado, Utah, and Arizona, thereby creating the only spot in the entire country where four states meet. Its capital is Santa Fe, which is, in fact, the oldest capital in the country – founded in 1610.
But the largest city is Albuquerque, founded in 1706.
The Economy of New Mexico
The state’s economy is highly diversified, with agriculture, cattle ranching, lumber, tourism, and scientific and technological research as the main sectors of its economy. Moreover, the state is a leader in the country regarding oil and gas, mining, film, media, and aerospace.
All these give the state a GDP of about $95.73 billion and a GDP per capita of about $46,300. Here are some more condensed facts about the state of New Mexico. Speak With Our Loan Officer for Mortgage Loans
The Population of New Mexico
It has a population of 2.1 million people.
The state of New Mexico has been population growth. It has a growth rate of about 0.64%, ranked at position 30 in the entire country by state.
What Is The Median Income in the State of New Mexico
Individual income stands at $26,500, while household income stands at $51,250.
New Mexico Tax Rates
The state has a 5.0 percent and a 4.3 local sales tax rate. Regarding property tax rates, New Mexico has one of the lowest rates, averaging 0.78%. The annual tax rate is about $1,400, which is significantly lower than the national rate.
Education System in New Mexico
The education is par with other U.S states, with over 60% of the population holding some degree. There are 97 school districts in states where you will find above-average public and private schools.
How Is The Weather In New Mexico
The summers are hot and dry, while the winters are short, cold, and snowy. It is mostly clear throughout the year, in any case.
New Mexico Median Home Prices
The average cost of homes in New Mexico is $450,000, with the price per square foot averaging at about $195
Buying Versus Renting In New Mexico
The state is landlord friendly, given that evictions take a little less time than in other states. But this doesn’t mean renters don’t have any rights. On the contrary, every renter has a legal right to seek fair and proper housing without any form of discrimination against them.
What is a VA Home Loan?
The VA home loan is a special type of loan introduced only for veterans and active duty military members to accelerate the process of buying homes for them and their families. These loans were by the U.S Department of Veteran Affairs (VA), require little to no down payments, and also have much-reduced credit history requirements. This means that even with a bad credit history, you would be able to qualify for the loan. Speak With Our Loan Officer for VA Loans
What Are The Requirements For VA Loans In New Mexico?
For starters, we should point out that the requirements for VA loans are the same in all the states in the U.S. Now, with that said, some of the major requirements include:
- You must have a VA certificate of eligibility.
- This certificate is eligible only to veterans, active duty members, and also their wives or widows who qualify.
- This loan is not eligible for the children of a veteran or an active-duty soldier.
- You have served at least 90 days during wartime and 181 days during peacetime.
- As for reserves or National Guard, you have served at least six years.
What About The Benefits of VA Loans in New Mexico?
You don’t need any down payment to qualify for VA loans in New Mexico. There is no down payment requirement on VA loans in New Mexico. Homebuyers can qualify for VA loans in New Mexico with a 100% down payment, and no mortgage insurance, with competitive mortgage rates. Rates on VA loans in New Mexico are generally lower than mortgage rates on conventional loans.
Can I Buy a House in New Mexico with Bad Credit?
You can qualify for the loan even with a bad credit history. You can qualify for the loan if the lender considers you a satisfactory credit-risk borrower.
What is the VA Loan Limit in New Mexico?
As in other states, the VA loan limit in New Mexico has been removed for borrowers with full entitlement. Effective January 1, 2020, this adjustment allows qualified veterans and service members to borrow the maximum amount a lender is willing to offer without requiring a down payment, as long as they possess full entitlement and satisfy the lender’s credit and income criteria.
Full Entitlement for VA Home Loans in New Mexico
- No Loan Limits: If you have full eligibility (indicating that you do not currently have an active VA loan or have settled a prior VA loan and sold the property), there are no restrictions on the sum you can borrow with VA Home Loans in New Mexico. The determination of your eligibility will depend on your income, credit score, and property value.
Partial Entitlement for VA Loans in New Mexico
- Loan Limits Apply: VA loan limits can apply if you have an active VA loan or have used part of your entitlement. In this case, the limits are based on the conforming loan limits set by the Federal Housing Finance Agency (FHFA). For 2024, the standard conforming loan limit for a single-family home in most areas is $726,200. Higher-cost areas have higher limits.
Key Points for VA Home Loans
- Full Entitlement: Borrowers utilizing VA Home Loans in New Mexico can finance the entire purchase price as long as they meet the requirements. Loan limits are not applicable.
- Partial Entitlement: Loan limits apply based on FHFA condo ming loan limits. You may need to make a down payment if your loan exceeds the limit.
To determine your specific entitlement and whether loan limits apply, you can check your Certificate of Eligibility (COE) or consult with a V -approved lender. VA Loans in New Mexico provide a valuable option for veterans and service members looking to purchase a home with favorable terms. Click here to buy a home with VA Loans
Buying a Home With VA Loans in New Mexico
When you want to buy a property with VA loans in New Mexico, here are a few things you need to keep in mind. There is no minimum credit score requirements on VA loans in New Mexico. If a lender requires a 620 to 640 minimum credit score requirement, contact us at Gustan Cho Associates We have no minimum credit score requirements on VA loans in New Mexico.
What is the Lowest Credit Score for a VA Loan in New Mexico?
The team at Gustan Cho Associates has helped thousands of families get into a home with VA loans with credit scores down to 500 FICO. There is no maximum debt-to-income ratio caps on VA loans in New Mexico. Again, the team at Gustan Cho Associates has helped thousands of veterans get qualified, approved, and closed with debt-to-income ratio up to a 65% DTI on both manual and AUS approved automated findings.
Get Qualified and Pre-Approved VA Loans in New Mexico
before you do anything else, you need to be pre-approved for the VA loan first. The reason is that when you get the pre-approval letter, you will not only be sure of the amount you can spend on the purchase.
You will also prove to the seller that you are serious about the purchase and that you are just not wasting their time. And as we mentioned above, you can only be eligible for a VA home loan if you are a veteran, active duty member, or spouse to an active soldier, and you must also have attained a couple of other requirements.
Get a Reputable Real Estate Agent
having a reputable and knowledgeable real estate agent by your side is crucial as they will enable you to navigate all the complexities of New Mexico. Remember, when buying property, you will first need to find ideal properties, you will need to schedule showings, make an offer, and lastly, close the purchase.
Is Now a Good Time To Buy a House in New Mexico?
All these can be challenging if you don’t have any help. When hiring an agent in New Mexico, you first need to identify the town or city within which you are planning to buy a house so that you will be able to find an agent who is very familiar with the local market.
For instance, if you want to invest in Albuquerque, you should know that there are 4,300 real estate agents in the city, while Santa Fe has 1050 agents. Hundreds of other agents are in all the other towns in the state. Do your research properly to ensure that you hire the right one. Qualify for VA Loans in New Mexio
Decide Where You Want To Live in New Mexico
This is one of the most important decisions you will have to make because different locations offer different experiences, not to mention that property prices vary with location. Regarding home prices, property in the Albuquerque area, in Bernalillo County, sits at $320,000 in 2022, while in Las Cruces’s Dona Ana County, the median price is about $280,000.
Calling Santa Fe Home
If you want to invest in the capital, Santa Fe, the median property prices are about $585,000, making it the most expensive location in New Mexico. Other than property prices, it would help to consider the cost of living in these areas, plus many more. For instance, life in Las Cruces is way cheaper compared to Albuquerque and Santa Fe.
You should research all other locations of interest to determine the cost of living before deciding where to settle. Check also the local school system, as you would want to buy property in a location where your kids can access a better education system. You should consider these things when selecting where you want to buy a home in New Mexico.
Buying Your Dream Home With a VA Loan in New Mexico
After you find your dream property, you will need to ensure it’s in good condition. You no longer have to rent if you are eligible for a VA loan. You can buy a home with VA loans in New Mexico with no money down and no closing costs. So, get a professional to inspect everything in the property, to ensure that there are no major problems that would cost you money to repair.
And if there are such problems, they must be considered when negotiating the final price. It is also important to have an appraiser who will assess the home’s value to ensure that you are not into paying more than the property is worth.
Why Would a VA Loan be Denied in Underwriting?
A VA loan might be denied in underwriting for several reasons. VA Home Loans typically have more lenient requirements compared to conventional loans. Still, it’s important for underwriters to verify that the borrower meets specific criteria and to assess the level of risk associated with the loan. Here are some common reasons why VA Loans in New Mexico might be denied in underwriting:
Credit Issues
- Low Credit Score: Although the VA does not set a minimum credit score, lenders often have their own minimum requirements, typically around 620. A score below this threshold can result in denial.
- Recent Negative Credit Events: Recent bankruptcies, foreclosures, late payments, or collections can negatively impact your application.
- High Debt-to-Income (DTI) Ratio: The VA tends to be more flexible regarding DTI ratios, but lenders generally favor a DTI of 41% or less. A higher ratio could indicate potential financial risk.
Income and Employment Concerns
- Unstable Employment History: Lenders prefer borrowers with at least two years of steady employment. Frequent job changes or gaps in employment can cause concern.
- Insufficient Income: Your income must cover the mortgage payments and other debts. A higher income could lead to denial.
- Unverifiable Income: All income sources must be verifiable through tax returns, pay stubs, or other documentation. Your VA Home Loan might only be allowed if your income is verified.
Property Issues
- Appraisal Problems: An appraiser approved by the VA must assess the property to verify that it complies with the VA’s Minimum Property Requirements (MPRs). VA Loans in New Mexico might not receive approval if the property is appraised for less than the purchase price or fails to meet the MPRs.
- Property Condition: Significant issues with the property’s condition, such as safety hazards or major repairs, can lead to denial unless addressed.
Insufficient Documentation
- Incomplete Application: Please include information or errors in your application to avoid delays or denial.
- Inadequate Documentation: Failure to provide the required documentation, such as proof of income, tax returns, or bank statements, may result in rejection.
Changes in Financial Situation
- Increased Debt: Taking on new debt or making large purchases during underwriting can affect your DTI ratio and lead to denial.
- Decreased Income: A reduction in income or loss of employment during underwriting can result in denial.
Issues with VA Entitlement
- Insufficient Entitlement: You must have enough remaining VA entitlement to be eligible for the loan amount requested.
- COE Issues: Problems obtaining or verifying your Certificate of Eligibility (COE) can also lead to denial.
Issues with Down Payment or Assets
- Insufficient Funds for Closing Costs: While VA Loans in New Mexico typically do not require a down payment, closing costs must be covered. Not having enough money saved can lead to denial.
- Unverified Funds: If the source of your funds cannot be verified, it might result in denial.
Tips to Avoid VA Loan Denial:
- Review Credit Reports: Review your credit reports for inaccuracies and resolve problems before applying.
- Maintain Stable Employment: Ensure a stable employment history and avoid changing jobs during the loan process.
- Prepare Documentation: Collect all required paperwork and verify they are precise and current.
- Avoid New Debt: Do not take on new debt or make large purchases during the loan process.
- Ensure Property Meets MPRs: Ensure the property you purchase meets the VA’s Minimum Property Requirements.
- Communicate with Lender: Regularly communicate with your lender and respond quickly to requests for more information.
Addressing these potential issues and preparing in advance can improve your chances of successfully obtaining VA Loans in New Mexico.
Summary and Final Thoughts
If you are a veteran or active-duty military member looking to buy property in New Mexico, you should know that your dream of home ownership is much more possible thanks to the government’s establishment of VA home loans. The good thing about these loans is that you would be able to access them even with a bad credit history, and you don’t need any down payment. So, get a reputable mortgage broker in the state to apply for a VA loan today!
FAQs: Getting Approved For VA Loans in New Mexico With Bad Credit
- 1. What are VA Loans in New Mexico? Mortgage loans in New Mexico designated for veterans are provided by private lenders but backed by the U.S. Department of Veterans Affairs (VA). These loans are accessible to veterans, active-duty service members, and specific National Guard and Reserves members. They often feature lower interest rates, no down payment requirements, and more lenient credit standards.
- 2. Who is eligible for VA Home Loans in New Mexico? To qualify for VA Home Loans in New Mexico, individuals must be veterans, active-duty service members, or eligible surviving spouses. You must possess a Certificate of Eligibility (COE) to be eligible. You must meet specific service requirements, such as completing at least 90 days during wartime or 181 days during peacetime.
- 3. Can I get a VA Home Loan in New Mexico with bad credit? You can qualify for VA Home Loans in New Mexico even with bad credit. The VA does not establish a particular minimum credit score requirement. Still, the majority of lenders prefer a credit score of 620 or higher. The flexible credit requirements make VA loans accessible to veterans and service members with less-than-perfect credit histories.
- 4. What is the VA loan limit in New Mexico? From January 1, 2020, New Mehave Bebo borrowers have no loan limits with full entitlement for VA Loto. This means qualified veterans and service members can borrow the maximum amount from a lender without needing a down payment. Individuals who still need to fully meet the eligibility criteria must follow the loan constraints set by the Federal Housing Finance Agency (FHFA).
- 5. What are common reasons VA Loans in New Mexico are denied underwriting? VA Loans in New Mexico can be denied during underwriting for several reasons, including credit issues, income and employment concerns, property issues, insufficient documentation, changes in financial situation, issues with VA entitlement, and problems with down payment or assets.
- 6. How can I avoid being denied my VA Loan in New Mexico? To avoid denial of your VA Loan in New Mexico, review your credit reports for errors, maintain a stable employment history, gather all necessary documentation, avoid taking on new debt or making large purchases, ensure the property meets the VA’s requirements, and keep in regular contact with your lender.
- 7. What are the benefits of VA Home Loans in New Mexico? In New Mexico, the benefits of VA Home Loans encompass several advantages, such as eliminating the need for a down payment and no requirement for mortgage insurance. Moreover, these loans offer attractive interest rates and adaptable credit prerequisites. Furthermore, in times of financial hardship, assistance is available from the VA to support veterans.
- 8. How do I apply for a VA Loan in New Mexico? Remember, to get your VA Loan in New Mexico, you must obtain your Certificate of Eligibility (COE) from the VA. Next, select a VA-approved lender and pre-qualify for the loan to determine your affordability. Then, complete the lender’s loan application and submit the required documentation. Follow this by undergoing the underwriting process, where your financial information and the property’s value will be evaluated. Finally, close on the loan once it is approved.
- 9. What should I consider when buying a home with a VA Loan in New Mexico? When purchasing a residence using a VA Loan in New Mexico, consider the property’s location and condition, collaborate with an experienced real estate agent, and arrange for a thorough inspection and appraisal by a professional. Additionally, investigate the accessibility of nearby amenities, schools, and services.
- 10. Is now a good time to buy a house in New Mexico with a VA Loan? The timing of purchasing your home will be influenced by different factors, such as the conditions of the real estate market, your financial standing, and your preparedness to make a purchase. Remember to consult a seasoned real estate agent and lender to determine the right time to purchase a home in New Mexico using VA Home Loans.
By understanding these aspects of VA Loans in New Mexico and VA Home Loans, you can better prepare for home-buying and increase your chances of successfully obtaining a VA loan.
If you have any questions VA Home Loans or you need to qualify for VA loans with a lender with no overlays, please contact us at 800-900-8569. Text us for a faster response. Or email us at alex@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays.
This blog about Getting Approved For VA Loans in New Mexico With Bad Credit was updated on June 19th, 2024.
