VA loans are guaranteed but, when applying for a VA home loan in Plano TX, you should be aware that poor credit can stand in the way and take the "guaranteed" out of the guaranteed loan. The Veteran's Administration itself says that there are no credit score requirements for a VA loan but, as Military.com points out, lenders only want to take on borrowers who pay on time. If your credit in the last 12 months isn't that great, you could be turned down for a VA home loan. The lender does have the freedom to review the complete loan package when making the decision to approve or deny. However, that opens the door for other factors to influence whether or not you get your home loan.
For example, you may be aware that having other debt when applying for a VA home loan in Plano TX won't necessarily affect the outcome. Still, the lender and the VA will want to know that you have the resources to repay your home loan while still paying off other debt. That's why you'll have to list compensating factors if the debt ratio including your VA loan is over 41 percent. Acceptable factors might include low balances on your other debts, meaning that they will be paid off within a few months or under a year, or a letter from your employer guaranteeing a salary increase within a short amount of time. Anything that improves your immediate credit situation will count toward balancing what might seem like a credit risk at first glance.
The best way to ensure that your VA loan will be guaranteed is to address credit issues before you even apply. Bring your accounts current and keep them current so you can show at least a solid 12-month history. Pay off smaller debts before applying so that they don't even appear on the underwriter's radar. Don't incur any new debt right before applying for a VA loan, and don't apply for other types of credit even if you don't intend on using them. Every time you apply for credit, it affects your credit report.
If you want to apply for a VA home loan in Plano TX but are unsure of the credit issues, call Summit Funding at (972) 864-3530. Joy Ziminskas and her experienced team know all the ins and outs of VA home loans and can answer any questions you have.
References:
http://www.benefits.va.gov/BENEFITS/factsheets/homeloans/VA_Guaranteed_Home_Loans.pdf
http://www.military.com/money/va-loans/bad-credit-in-2012-fix-it-for-va-loan-in-the-new-year.html
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