VA Loan after Foreclosure
VA loan is a flexible and powerful lending option available in the market. Unlike other loan issues, in VA loan the borrower is required to repay a quarter of the loan as guarantee and to protect the lenders.
The highly competitive rates are one of the many reasons why many people want to obtain VA loan.
Obviously, obtaining VA loan offers lots of significant benefit for borrowers. The borrower can purchase without down payment. Likewise, this loan scheme offers less stringent requirements and standards as compared to conventional loans. On the other hand, almost 80 percent of VA applicants are not qualified to apply for conventional loan. Borrowers need not worry about private mortgage insurance that is quite expensive.
How to use VA loan after Foreclosures?
Many people have misconception that applying for VA loan is not possible after foreclosure. This is a mistake because anyone can have the chance to receive VA loan approval after foreclosure as long as you meet the necessary standards.
Common Standards
A borrower that has no records of late payments can apply for VA loan. Likewise, the applicant should not have derogatory credit records and must have minimum credit score that ranges from 530 to 640. In addition, anyone can borrow VA loan if the reason of foreclosures is caused by extreme extenuating circumstance that include unemployment and medical bills that are not covered by insurance.
On the other hand, if you will apply for VA loan after foreclosures you should abide with the loan limits set by the state. However, each state offers different loan limits. In like manner, borrowers should also deal with the VA loan entitlement according to the amount released. The entitlement depends on the income of the member that would range from $36,000 to $60,000. Also, you should follow the guidelines set by federal agencies.
Certificate of Eligibility
Once you are qualified to apply for VA loan after foreclosure the next thing that you should tackle is to obtain certificate of eligibility from the state you are applying for VA loan. Keep in mind that you should demonstrate and provide the closing cost and the interest rate. If you do not have idea about VA loan you should hire loan officer to ensure that you can obtain positive result.
Moreover, you should also think about providing greater liquidity so that you can obtain better interest rate that is not possible in conventional loans. The good thing about this VA loan is that Veterans can apply for it after foreclosure without worrying the costly payments. Although it requires VA funding fee but it does not require paying the Loan Guaranty Program. Similarly, if you have foreclosed for the past 3 years you can still have the chance to apply for VA loan as long as you meet the guidelines.
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