Hello, I qualify for a Va loan, but have horrible credit and have very little money for a down payment. Is there any hope for me purchasing a house?

Asked by Cheeseberger6776, Pasadena, CA Sat Oct 6, 2012

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Shane Milne’s answer
Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Sat Oct 6, 2012
VA mortgages don't require a down payment and permit the seller to pay all of your closing costs, so not having much money for a down payment isn't an issue on a VA loan. There are some out of pocket expenses when you make an offer though, the first would be the earnest money deposit which is usually around 1% of the sales price here in SoCal. The earnest money deposit is credited to you when you close on the home though, so eventually that money would come back to you. The next is a home inspection, which I strongly recommend you get unless the property you are buying is brand new/never been lived in. The home inspection will run you around $300-350 or so. On VA loans the appraisal is paid at closing/part of the closing costs, and the termite/pest inspection is required to be paid by any one other than you (meaning the seller or real estate agent usually have to pay for it) - so don't worry about needing to have upfront funds for those two items.

A 630 credit score isn't that bad though - it certainly isn't excellent but it's high enough to meet the minimum score requirements on most lenders VA loan programs (which are usually either 600 or 620). What is on your credit is equally as important as your credit scores though. The last 12 months of credit is closely looked at. Do you have a copy of your credit report history? Have you had any new collections/charge-offs or late payments within the past 12 months? Where did you get your credit score from, another mortgage lender or was it from an online website?

Shane Milne | Lending in all 50 states | NMLS #81195
2 votes
Paul, , Palmdale, CA
Wed Oct 24, 2012
Check with NACA.com they have special mortgages to offset some of the porblems people of modest means often face. Your credit rating may not be a problem.
0 votes
carlos parra…, Other Pro, Monrovia, CA
Sun Oct 7, 2012
Talk to several bankers and see what happens. They are the only ones that can help you.
0 votes
Cheeseberger…, Home Buyer, Pasadena, CA
Sat Oct 6, 2012
My credit score is 630... low because of a recent divorce.
0 votes
Rosalie Phil…, Agent, Sarasota, FL
Sat Oct 6, 2012
From my experience in discussing potential clients pre-qualification for a VA Loan, the credit score must be in an acceptable range.
0 votes
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