Getting approved for a VA mortgage after a bankruptcy or foreclosure can be challenging.  The VA mortgage loan program is essentially the last mortgage option in the United States that does not have a minimum credit score.  Even the Federal Housing Administration caved into pressures to implement a minimum credit score on the FHA mortgage loan.  After boasting of no minimum credit scores for nearly 76 years, FHA implemented a new credit policy in 2011 that mandates a minimum credit score of 500 for FHA mortgages.  It’s hard to believe that the US government has not increased the VA requirements for home buying or refinancing at a time when so many loans are delinquent.

Lock into an Affordable VA Mortgage that Guarantees a Fixed Interest Rate for 15 or 30-Years

As you may have started to realize, the VA mortgage loan is a special finance program for the military.  VA financing is the last of a dying breed of flexible and aggressive home loan programs. The VA home loan program requires no down-payment for home buying and no equity for rate and term refinancing.  VA interest rates are as low as any home mortgage rate on the planet, so if you are eligible for VA financing, we strongly suggest that you seize this opportunity now while the rates and loan guidelines are so appealing.  There is no guarantee that the Veteran’s Affairs won’t tighten guidelines for VA refinancing and home buying. In fact, it is more likely that VA loans will become less aggressive if you simply look at the current trends in the industry.

With significant rises in delinquencies, defaults and foreclosures, one of the ways banks and VA lenders protect themselves is to require more from the borrower. For now, VA refinancing with bad credit is still possible for loan applicants that have their VA loan eligibility and income documentation to demonstrate their ability to afford the proposed mortgage payment. If you are a VA borrower who recently had a foreclosure, you will not be eligible for a VA home mortgage for 24 months from the foreclosure date on the credit report. After two years, you will be eligible for home purchase or refinance with the VA program. The lenders will be looking for a clear demonstration from the VA borrower that they got back on track since the foreclosure and now have the ability and willingness to make their VA loan payment on time each month.  In most cases it will help if the VA borrower can reestablish credit with a credit card or an auto loan in which timely payments could be documented.

Take a minute and speak with one of our mortgage consultants so that they can help you estimate monthly payments and determine qualifying for a VA loan with bad credit.