For most people, one of the best ways to buy a house is through a mortgage application. This is especially true if you haven’t got enough cash on hand to pay for the full price yourself. For vets ad service members, you can take advantage of a VA Loan Plano to make your dream home purchase a reality.
Good Read: The Many Advantages Of VA Loans
What does it take to qualify for a VA mortgage? A VA Loan Plano has its own set of criteria for vets and service members who wish to acquire a home loan. The following are eligible for a VA mortgage.
- you’re able to commit active service no lower than 90 consecutive days during a war
- you’re able to commit active service of at least 181 consecutive days during peacetime
- you performed duties in the National Guard or even in the reserves for six years
- your spouse was a vet who was killed while on duty
- can produce a COE or Certificate of Eligibility
This is to say that not all active service members and vets get mortgage approval. So, you’re planning on applying for a VA Loan Plano, it pays to check what could cause your lender to decline your home loan application. These are as follows.
You applied for a VA mortgage to buy a vacation home
Note is that a VA loan is only for those eligible vets and service members who want to buy a primary residential house. If you’re wish to invest in real estate or want to buy another house as a vacation home, you’re wasting your time applying for a VA loan. This type of mortgage is only for owner-occupied residences.
You applied for foreclosure or bankruptcy in the past
The Department of Veterans Affairs is indeed keen on helping eligible members acquire a home through the VA loan. However, you’re still required to show your lender that you’re able to pay off a mortgage. If you hit a rough financial patch such as a foreclosure or bankruptcy, then you’re most likely to get a no from your lender. You will need to wait a few years and work your way into showing lenders you’re capable and responsible enough to qualify for a VA loan.
You have a bad credit score
VA loans do not require its members a high credit score to qualify for a home loan. However, a reputable lender has the right to deny your mortgage application if your credit score comes up too low. The cause can be anything – bankruptcy, foreclosure, and poor debt payments. If you plan on getting a VA mortgage in the future, make sure to start building up your credit score up to at least 620.
Good Read: The Side Effects of Bad Credit
You have a high Debt-To-Income Ratio
Most lenders allow their borrowers a mortgage as long as they don’t go beyond a DTI ratio of 41%. Your DTI ratio is your monthly gross income compared to your debt obligation each month. This means you, as a borrower, need to have a decent amount of cash left even after you pay your monthly debts.
VA mortgage is an excellent home loan option for those eligible vets and service members. If you don’t want to get denied for this type of mortgage, keep these facts in mind. You’ll get better chances of a mortgage approval with a good credit score, low DTI ratio, a good credit report, and by using the loan to buy a residential home.