The advantages offered by a government-backed mortgage through the VA loan benefits program are vast; in particular, no down payment is required, and the mortgage insurance requirements of many traditional loans are waived. With more than 700,000 home loans guaranteed by the VA last year, veterans are in an excellent position to take advantage of the program. However, not everyone who applies for a VA loan will be approved. Here are three tips that can help make your VA loan application successful.
While VA lenders typically have lower minimum credit score requirements than for conventional home financing, your credit history still pays a key role in getting approved for a VA loan--as well as getting the best interest rate possible. Make sure there are no mistakes in on your credit report by requesting a copy of it before applying for a mortgage through the VA program. Almost 25 percent of credit reports have errors that are significant enough to prevent mortgage approval.
When applying for a VA loan, lenders will need to see that you have a stable source of income that you can continue to rely on to make your mortgage payments. Keep in mind that the VA generally requires a debt-to-income ratio of less than 41 percent, although this varies by family size and geography.
The purpose of the VA's loan program is to help veterans purchase a primary home for themselves or refinance a current mortgage on their residence. Any type of home qualifies from a traditional single-family residence to a condo as long as you plan to live in it--so don't try to use your VA loan to finance the purchase of a vacation home, farm or investment property.
Wondering if you might qualify for a VA loan? The mortgage experts at Midland Mortgage Corporation can help. Please contact us today with any questions and to learn more about our services.