For a mortgage, credit scores hold special importance. If you are about to become a homeowner for the first time, you need to be extra careful. The score and history can paint a very realistic picture of your adulthood. Your financial life reflects on the FICO score, and it is crucial to know where you stand. The mortgage lenders also heavily depend on the score you have. If the lenders want to determine whether you are financially stable, the credit scores play the main role. But what happens if you have 550 credit scores?
One look at such a low score might put off your enthusiasm. You might not be ready for the home loan. However, the housing market has undergone significant changes. As a result of it, various government-backed loans have appeared with the hope of helping. A few exclusive loans backed by government agencies extend the help in need.
With such low FICO scores, you can manage to have a mortgage. And the results are not promising! You might not receive an affordable interest rate or loan term. But there is a VA home loan credit score 550 in Houston, TX if you are a veteran or active-duty service member. Let’s go through the important things you need to remember.
Finding the Right VA Loan
Not every private lender offers the VA loan, not every lender is licensed. The only way to pick the perfect loan officer is to shop around. When you shop around, you increase the chances to get a great deal. And the deal refers to low closing costs and affordable interest rates! The home loan rate depends on your credit score. If you were going for a conventional loan, the rate might be around 6.35% against 550 scores. Thankfully, VA loans have a more competitive rate. But this does not change an integral part – a better FICO score ensures a good interest rate. Look around and check whether anyone is offering the mortgage with 550 scores. It is best to come across a local VA lender.
Prove Your Employment
If you have a certificate of eligibility, it does not guarantee anything. Even after being an eligible veteran, you can face rejection for a VA loan. One of the things that many borrowers underestimate is work experience. A borrower must be employed for at least 2 years. If you change your employment, make sure it is for a higher salary. Solid employment assures a responsible borrower. Even though you have low credit, your work history can save the day. Remember, you cannot apply for the VA loan with credit scores being lower than 500.
In essence, if you have 550 credit scores, you are not alone. Therefore, get rid of the thoughts related to not landing a mortgage. As long as you can think out of the box and follow individual strategies, things can go in the right direction. You are never too late to work on your credit scores. So, pay bills on time and monitor credit scores!