Essential Facts About the Processing & Credit score for VA loan in Houston

VA loan is a mortgage program initiated by the Department of Veteran Affairs; a loan that is solely for the veterans in the USA. As far as eligibility is concerned, the loan applicant can either be a veteran, in active service, or the spouse of a veteran, active service person, or deceased army personnel. The program was started as an attempt to make the loan application and approval process easier for the people who serve the country and their families; making it easier for them to buy a home. Keeping that in mind, this article will focus on the facts about mortgage processing along with the credit score for VA loans in Houston.

Credit Score for VA Loans

Technically there is no required credit score for a VA loan, but most lenders make it’s a point that the applicant has a minimum credit score of 580 – 620. In some cases, the lender might agree to process the loan at a lower credit score. However, in that case, the loan terms might be slightly different or rather competitive.

Difference between a VA Loan and a Conventional Mortgage

The VA loan is facilitated by the Department of Veteran Affairs, and it is solely reserved for veterans, active service persons, and their families. But that’s not the only differentiating factor. Let’s do a quick review:

  • Compared to conventional mortgages the VA loans have a lower rate of interest.
  • The VA loan does not require you to pay a down payment like other mortgages and even government-backed loan plans.
  • You have not required to pay the private mortgage insurance or PMI like other traditional loans.
  • The credit qualifications tend to be on the flexible side compared to conventional loans.
  • Your VA loan application might take longer to process than conventional mortgages. The applicant might require furnishing more documents for approval. However, that can be sorted by the lender or finance broker that you work with.

While it is true that the cost to get approval for a VA loan is lesser than the other, you still need to pay certain fees, like the VA funding fee. It paid directly to the Department of Veteran Affairs. Till 2023, the funding fee has been set to a maximum of 3.6%.

Well, that’s all the essential facts that you need to know about VA loans. To get a fair loan term with a low credit score for a VA loan in Houston, reach out to an experienced and reputed loan broker.

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