Before embarking on step two of the VA loan process, it is crucial that you have pulled your credit report in advance with all three credit reporting agencies to see where you stand with your FICO credit score. You should thoroughly examine the report for any errors and/or identity theft, taking care of any such issues beforehand. Although Veteran’s Affairs does not require a minimum score for a VA loan, most lenders have internal requirements, asking for a credit score of 620 or higher.
After you have completed this important task, you will provide this information to your VA loan specialist. They can answer any questions that you have and help you with determining the loan amount you are eligible for through a pre-approval process. The pre-approval process is required by most realtors before working with you to find a home. It serves to give you piece of mind and a price range that you can afford based on a pre-approved amount.
To obtain a VA loan, the law requires that:
• The applicant must be an eligible veteran who has available entitlement.
• The loan must be for an eligible purpose.
• The veteran must occupy or intend to occupy the property as a home within a reasonable period of time after closing the loan.
• The veteran must be a satisfactory credit risk.
• The income of the veteran and spouse, if any, must be shown to be stable and sufficient to meet the mortgage payments, cover the costs of owning a home, take care of other obligations and expenses, and have enough left over for family support.
Your experienced VA loan specialist will be able to further discuss specific income and other qualifying requirements. According to the VA Loan Quick Guide, the VA loan limits generally do not exceed $417,000 (exception in maximum limits with VA Jumbo loans in designated High Cost counties – calculations can vary).