Want To Get A VA Home Loan? How To Prepare For The Process
When it comes to getting a VA home loan, you will not get a loan just because you have served in the military. You are going to have to meet certain criteria in order to be approved for a VA loan.
Take Care of Your Credit Score
First, you need to make sure you are taking care of your credit score. With a VA loan, it is not just about your military service; your credit score still matters. You ideally want to have a credit score, at least in the fair range.
If your credit score falls within the poor range, you are going to want to improve your credit score, as a VA loan has minimum credit score requirements, and a poor credit score is not going to allow you to qualify for a VA loan. You need to be able to show that you have a history of paying off your loans and keeping your credit card balances low.
Pay Attention to Your Debt to Income Ratio
Next, with a VA loan, they are going to measure your debt to credit ratio. Your debt to credit ratio is designed to show you how much debt you have in comparison to how much credit you are authorized to have.
You need to have a lower debt to credit ratio in order to secure a VA loan, as this is something they look at. The VA doesn't want you to be overextended, so you are going to want to reduce your credit card balance and the balance on any other loans you have.
Balance Your Budget
You also need to balance your budget. You are going to need to show that you can afford the home VA loan payment and to pay all your additional debt while also maintain a minimum standard of living. The minimum standard of living is actually set by the US Department of Veteran Affairs.
If your budget does not allow you to pay all your bills, pay the home loan, and maintain the standard of living set by the VA, you either need to increase your take-home pay or decrease your debt so you can meet this standard.
Get Your Paperwork Together
Finally, you are going to want to get your paperwork together. You are going to need to provide all the same income verification that you would with a normal loan.
For example, you will need paperwork that shows your income and employer information. You will need to disclose all your assets and debts as well. Getting this paperwork together in advance can make the application process go smoother.
When it comes to obtaining VA loans, you need more than your military service to secure the loan. You need at least a fair credit score, a low debt to income ratio, the ability to maintain a certain standard of living, and all the right paperwork in order to qualify for a VA loan.