Capital Bank is a national lender with expertise in VA Loans – so you feel like you are speaking to your local expert.
Whether you apply for a new loan or a VA refinance, you must convince the bank to take a risk on you. Even if you have your Certificate of Eligibility in hand to show you have paid your dues in terms of service for these loans, a bad credit record can doom your request. For the VA refinance process, the credit requirements are not as strict as for a new loan, but you must still convince the bank that you have the money to pay the mortgage and other debts. With a VA loan, the government backs up to 25% of the loan, so all taxpayers are in jeopardy if loan applicants or refinancers are poor credit risks.
When you apply for a VA loan or a VA refinance from FortressVALoans.com, you will need to provide your lender with proof of income, which includes pay stubs to show you have an income sufficient to make the payments. You will also need to provide tax forms, banking information, Social Security numbers, and other personal details. As long as your current information shows that you have the means to pay your bills in the future, you are likely to qualify for your VA home loan benefits.
The VA does not have a minimum credit score requirement, although it expects the lender to verify the borrower’s credit history. Many times, the lender will have standards that set a 620-680 minimum credit score. To obtain a new loan or a VA refinance, you may have to work on your credit record to qualify for a loan. Each lender has its own criteria. Your credit does not have to be perfect, but it needs to show a pattern of responsibility.
Your credit score or FICO, which your VA-approved lender will evaluate, is based on a mathematical formula. Various components of your credit habits are assigned a value of your total score. These are:
While you cannot erase the past, you can improve your record by making your payments on time and paying down your credit cards so that you are using less than your available credit (about 30% is ideal). These two actions will show a lender that you are using credit and paying off debt responsibly. Depending on your circumstances, your lender for a new loan or VA refinance may concentrate more on the last year or so. As credit scores rise, the lender may give you the benefit of the doubt and approve your loan.
For example, some current service members and Veterans have credit problems related to past or current deployments. While you are gone, you want to maintain your credit and prevent anyone from taking out new credit in your name without your consent. If you did not take proper precautions to make sure that your bills were paid on time, you may find yourself with a record of late payments. As noted above, you can improve your credit rating by establishing a record of on-time payments. If you remain on track, a lender is likely to be more forgiving of past problems. FortressVALoans.com is happy to work with you so that you can qualify for your VA refinance.
Your first step to claiming your VA home loan benefits for a new home or a VA refinance is to establish your eligibility with the VA. You are granted a Certificate of Eligibility if you have fulfilled at least one of the following criteria:
Once you have your COE paperwork in hand, you can proceed to apply with the lender. For some types of VA refinance loans, you do not need to obtain a new COE.
One of the biggest benefits of using Veteran home loans is that the VA doesn’t set a minimum credit score. However, this doesn’t mean that the banks writing those loans don’t have one! At Capital Bank, N.A., we know you’re more than just a credit score. That’s why we look at a number of variables to determine your qualifications for Veteran home loans.
If you don’t have any credit, it’s possible to build some before ever applying for a Veteran loan. This doesn’t have to mean that you should go rack up a lot of credit card debt! Get a major credit card, make a small purchase and pay it off each month.
Showing that you can use credit responsibly will help prove that you’re a good candidate for Veteran loans. If you do carry a balance, try to keep it under 30% of your available credit.
Your credit score is just one factor we use to determine your ability to repay Veteran mortgages. We look at more than just your credit score, including:
If you have ever had a bankruptcy, tax liens or debts that were sent to collections, we’ll look past those 12 months to see how long ago your financial difficulties were.
A negative blip on your credit report won’t automatically disqualify you from a VA mortgage or VA loan refinance. We want to help you with buying a home and achieving the American dream, so we’ll do everything possible to work with you and help you get the VA mortgage you’ve earned.
If you do have recent negatives on your credit report, it’s possible to fix them.
If you find that you don’t meet the VA loan eligibility requirements, we encourage you to apply for an FHA loan instead. Capital Bank, N.A. is an FHA-approved lender and we are expertly versed in the various types of FHA loans, so we know how to get you the best mortgage possible! One benefit of FHA loans is that they have a smaller down payment requirement than conventional home mortgages, which means they’re ideal for potential homeowners who don’t have the full 20% down payment saved.
Whether you’re looking for a new VA loan, an FHA loan or even a Veteran loan refinancing option, the knowledgeable and experienced Veteran mortgage professionals at Capital Bank, N.A. can help you. Fill out our simple VA loan prequalification form, and a local mortgage professional will call you to walk you through the process and answer any questions you have about your credit or other special circumstances.
Don’t assume that a low or poor credit score automatically disqualifies you from a Veteran home loan and owning the home of your dreams — contact us today and let us help get you into the home of your dreams!