+1 vote
asked Nov 26, 2017 in VA Loans by Patrick Peterson

2 Answers

+1 vote
It is very difficult to get financing with a credit rating in the low 500s. Your ability to get loan approval depends on a few things:
1. Reason for low score. If you had good credit prior to becoming disabled, for instance, and then you had problems paying your bills, and now you are paying them on time, you may be eligible.
2. Down payment. The lower your credit score, the higher your down payment requirement, in general. FHA, for example, allows loans to applicants with scores as low as 500, if they have at least 10 percent down. The same rules apply -- you can have a low score if it is not due to financial mismanagement, and if you have been paying on time for at least a year.                                                                             
3. If your $1,775 a month is tax-exempt, your lender is allowed to "gross up" or adjust your income upward for mortgage qualifying. That's because you actually have more to spend if you don't have to withhold taxes. Whether that's enough depends on the amount of your other bills, and how much you need to buy your house. While some programs allow you to spend up to 50 percent of your gross income on housing plus accounts like car payments and credit cards (regular living expenses don't count), with a low credit score, this number will probably be 43 or 41 percent at most. our Home Affordability calculator can help you see what's affordable to you. https://themortgagereports.com/mortgage-calculator
answered Nov 27, 2017 by GinaPogol (47,650 points)
0 votes
Lets try to get your credit scores up. VA does not have a minimum credit score requirement. Its the lenders that sets minimum credit score requirements.  Its called VA Lender Overlays. As long as you can get an approve/eligible per AUS FINDINGS , you should be good. Timely payments in past 12 months is key.

Gustan Cho NMLS 873293
The Gustan Cho Team at USA MORTGAGE
www.gustancho.com
answered Feb 7, 2018 by GustanCho (106,540 points)

Welcome to The Mortgage Reports Q&A Forum. Have your questions answered by experienced mortgage and real estate professionals.
515 questions
662 answers
884 users