A VA loan is an excellent option to get the home of your dreams. It streamlines the path to homeownership for military members and their families.
If you’re worried about your credit score, we have good news.
Even though your credit score plays a big role in your interest rate...
It shouldn’t hold you back from getting a VA loan.
And we’re here to help you figure out what credit score you need to get the best VA loan for $300,000, $325,000, $350,000, and $375,000 mortgages.
WHAT IS A VA HOME LOAN?
VA loans are the most powerful mortgage options on the market. It can open the door to purchasing a home without a down payment for veterans and their families.
It also has loads of other benefits, such as flexible requirements for your credit score.
There’s just one catch:
You must meet service requirements to qualify for a VA loan. The specifics vary by type of service, but you can generally qualify if you’ve served on active duty, are part of the National Guard or Reserves, or are a surviving spouse.
HOW A VA LOAN WORKS
It’s true that the Department of Veterans Affairs backs VA loans.
But here’s the thing:
You can’t just walk into the VA and apply for a loan.
They don’t make or originate loans. Instead, you must go through a private lender. Finding the right bank or mortgage company can be tricky.
If you go through the wrong lender?
You could risk missing your closing date if your lender doesn’t stay on top of crucial documentation, such as your Certificate of Eligibility.
MINIMUM CREDIT SCORE FOR A $300,000 VA LOAN
Some lenders make you jump through hoops to qualify for a $300,000 VA loan, especially if your credit score is low.
At the Wendy Thompson Lending Team, we know what it takes to get approved.
We give it to you straight.
That’s why I’ll let you in on a little secret:
The VA doesn’t have a minimum credit score to qualify for a loan.
The VA doesn’t give out loans. You can only get one from a private lender.
And every lender can have a different minimum credit score requirement.
MINIMUM CREDIT SCORE FOR A $325,000 VA LOAN
Even though the VA doesn’t hold you to a minimum credit score, you can bet that VA lenders will.
That’s why your credit score matters when you’re trying to qualify for a VA mortgage.
It used to be that a credit score of 600 would be enough, but that isn’t the case anymore. Most lenders require a score of at least 640.
The good news is that improving your credit score isn’t as hard as you might think. We’ll talk about how to do that in just a minute.
MINIMUM CREDIT SCORE FOR A $350,000 VA LOAN
You know a good credit score matters when buying a house. But have you thought about why?
It comes down to the interest rate.
Your interest rate is the APR, or annual percentage rate, that lenders charge to let you borrow money.
And the better your credit score, the lower your interest rate can be.
If you’re looking at a VA loan for $350,000, boosting your credit score can have huge benefits. Let’s say you could improve your credit score by 75 to 100 points.
That one simple change could save you $50 to $75 a month on a $350,000 house. If you multiply that by a 30-year mortgage, that’s a savings of $27,000.
MINIMUM CREDIT SCORE FOR A $375,000 VA LOAN
There is a chance you could qualify for a better interest rate on a $375,000 VA loan, even if your credit score isn’t perfect.
Do you know why?
Because your credit score isn’t the only thing lenders look at.
To determine interest rates on a VA loan for $375,000, lenders also evaluate:
- Your employment history
- Your address history
- How much income you earn
- The total debt payments you have
- Your debt-to-income (DTI) ratio
EASY TIPS TO INCREASE YOUR CREDIT SCORE
If you’re looking to improve your credit score to buy a $300,000, $325,000, $350,000, or $375,000 home with a VA loan, here are a few simple strategies:
- Don’t sign up for any new credit cards or loans
- Check your credit report for errors
- Pay off any collections accounts you might have
- Set up autopay to avoid late payments
- Pay down larger balances to improve your DTI ratio
Seems easy enough, right?If you want expert help, visit our friends at My Credit Guy to increase your score.
READY TO APPLY WITH THE BEST VA LOAN LENDER?
Buying a home is a lengthy process. Between finding a lender, filling out the paperwork, gathering the right documents, and finding a house you love, it can be stressful.
That’s why we’re here.
We love working with Vets and their families, and we want to help you get a great rate on your new home.
Contact the Wendy Thompson Lending Team to see why we’re one of the top-ranked VA Loan and Mortgage specialists.
Deciding on the right VA lender is the most important decision you will make. Choosing the wrong lender can result in you losing your dream home or costing you hundreds of thousands of dollars in more interest over the life of your mortgage.
Don’t make that mistake, contact the Wendy Thompson Lending Team today!
You can start the process by clicking the yellow 'See if I'm Eligible' button on the right side bar under the 'Start your quote for a Home Loan' or call Wendy’s Team directly at (901) 250-2294, to get started on living the American Dream in the home of your Dreams!