Home Buying in Shrewsbury>Question Details

Jennifer Zel…, Renter in Bel Air, MD

My husband served in the US Army; has guaranteed benefits for a VA home loan up to $400,000. We both have credit issues, will this pose a problem?

Asked by Jennifer Zellmer, Bel Air, MD Tue May 1, 2012

I claimed bankruptcy in 2003, he in late 2009. Since that time, our main problem is some unpaid medical bills and a few small credit card balances.

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Assuming that you are discussing a purchase where you will be using your husband's VA entitlement and not refinancing an existing VA loan, the VA will require that your total debt to income ratio is 41% or less. If your BK's were discharged more than 2 years ago, you should be OK there. If you have any 30+ day late payments on any mortgages in the past 12 months or any foreclosures in the last 4 years, you are probably out of luck for now. Your credit scores must be at least 580 and more likely, 620. If you do not have a certificate of entitlement, you should order that now or work with a lender like us that has extensive VA experience. We are located close to you in York, PA and are licensed in Maryland. Please contact me at bill.filling@myrfc.com if you would like more information.
0 votes Thank Flag Link Tue May 1, 2012
As a 22 year vet, I have used my VA loan guarantee twice. Your husband is not guaranteed a loan regardless of his credit. You still need decent credit to use the VA loan program. Your missing payments on any bills since a BK is not looked upon well. Get a budget and stick to it for at least a year making payments to a savings account greater than your expected VA loan amount. Pay your bills on time then join your husbands fellow vets in buying a home and keeping the VA loan program in the Black.
0 votes Thank Flag Link Tue May 1, 2012
We are currently renting a home and have been for just under 5 yrs now. We've been in our current residence for just about 4 yrs. We have EXCELLENT references from our current landlord and our previous landlord, prior to moving in our current residence. We are working as best we can to repair the damage to our credit history. My husband's bankruptcy will be discharged in February of 2013.
Flag Tue May 1, 2012
You need to speak to a lender or mortgage broker to be sure, but I am going to guess and say you will have a very difficult time getting a loan now. Lenders are very conservative and cautious these days.
0 votes Thank Flag Link Tue May 1, 2012
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