VA Loans Blog

Your Credit Score and a VA Loan

July 31st, 2015 4:47 AM by Joan Rusco

A good credit score is a great starting point in securing a V.A. home loan from VALoansMN. Before we get into what constitutes ‘good credit’ let’s first talk a bit about the basics of a V.A. mortgage loan.

First, the Veterans Administration does not issue the loan.  The V.A. guarantees a portion of your loan. This is a great benefit you earned while in (or still in) the military. The nation’s Veteran’s Administration tells banks and other lenders that they will stand behind you and guarantee the loan will be paid back. As you may know the less risk to a lender the lower the interest rate on a loan since loans are priced according to risk. The higher the risk the more expensive the loan. Since the VA is standing behind your loan the lender is exposed to less risk thus, as a Veteran, you will get the lowest rate possible. However, your credit score still matters.

Second in our discussion on credit and interest rates, the higher your credit score the lower the rate on your mortgage loan. A credit score tells lenders how you’ve handled credit in the past. Even though the V.A. stands behind your  loan the bank doesn’t want to have to go to the V.A. and say “this Veteran is not paying his mortgage”. They then have to start the paperwork to get the V.A. to make it right. This takes time and in the finance world time is money. The bank (lender) just wants the borrower to make their payments and make them on time. So they look at how you’ve done in the past. If you’ve had trouble you may still get a loan to buy or refinance.

What is a good credit score? There’s no simple answer to this question. At VALoansMN we are in contact with many lenders and each lender has their own requirements. Our job is to find the lender that works best for you. A credit score in the 700’s makes it easy. However, we can find a good rate for you even if your score is lower than that.

Just because you had a bankruptcy or a short sale it does not disqualify you from getting a mortgage loan from VALoansMN. You may be surprised how easy it is with our help. We work with Veterans every day who’ve had such trouble. Don’t be discouraged. Let’s get to work on your situation and make it better.

Don’t be shy. You’ve earned the benefit of having the U.S. Veterans Administration stand behind your home loan. Let us help you take advantage of that benefit. We work with Veterans every day. Some have great credit others, well, not so much.

What’s the first thing you should be doing if you’re interested in getting a V.A. loan? Pick up the phone and call us at VALoansMN so we can give you an honest assessment of where you stand credit wise (612) 240-9922. Our job, and it’s a job we love, is to help you. You’ve served us now let us serve you.

Posted by Joan Rusco on July 31st, 2015 4:47 AM

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