The Loan Guaranty Scheme of the Department of Veteran Affairs has helped millions of veterans and active duty members of the US Armed Forces to get a home loan with ease. Now, most of the veterans who find themselves eligible under the prescribed standards set by the VA automatically assume that they would get a loan under the program. However, sometimes it might so happen that you might be eligible under the said rules, but you might not qualify for the loan. Why is it so? This is because there is a difference between being eligible for a VA loan and qualifying for a VA loan.
While understanding the difference between the two, you must first understand that the eligibility criteria for the VA loans is declared by the Veteran Affairs Department only to verify whether you are a veteran and that you have been honorably discharged from service. However, it does not mean that you would actually get the loan. In other words, being eligible would mean that the Veteran Affairs department is willing to provide the guaranty for the loan, but it does not necessarily mean that the lender would be willing to offer you the loan too.
It is a fact that risks to lenders are minimal since a government authority will take care of most of their losses in the event of a foreclosure but lenders would still not be interested to go through the aggravation caused by a foreclosure. Instead, they would set certain criteria of their own to determine whom to give and not to give a loan. Now, in most cases, lenders could deny you a VA loan for two reasons,
1) You don’t have the required credit score - The Department of Veteran Affairs does not have any minimum credit score requirement. However, the lender might still ask for a minimum credit score. This is because they only want to lend money to the people who can pay back the loan. It is not in the best interest of their business to get their loans foreclosed. That is the reason why they might check your credit score to check whether you can pay the interest or not. However, the value of the ‘minimum’ credit score differs from lender to lender. There might be certain VA approved lenders who would offer you a loan even if your credit score is low.
2) You need to go through the appraisal of your home in declining markets – A declining market is a home market where the Fannie Mae decides that the home value is not appreciating but depreciating. In these markets, the VA Lender might ask you to go through an appraisal of your home in order to give you a VA Streamline Refinance loan, even though the Veteran Affairs Department doesn't need you to go through an appraisal for such loans.
These are only few of the situations where you might be denied a VA Loan, even if you are eligible for such a loan under the prescribed standards. To get around such issues, it is advisable to get in touch with a reputed VA approved lender, as they would have VA loan specialists who would guide you on the problems you might be facing and they would also help you find effective solutions to such problems. Therefore, get in touch with such professional VA loan experts and get qualified for a VA mortgage loan with ease.
It is a fact that risks to lenders are minimal since a government authority will take care of most of their losses in the event of a foreclosure but lenders would still not be interested to go through the aggravation caused by a foreclosure. Instead, they would set certain criteria of their own to determine whom to give and not to give a loan. Now, in most cases, lenders could deny you a VA loan for two reasons,
1) You don’t have the required credit score - The Department of Veteran Affairs does not have any minimum credit score requirement. However, the lender might still ask for a minimum credit score. This is because they only want to lend money to the people who can pay back the loan. It is not in the best interest of their business to get their loans foreclosed. That is the reason why they might check your credit score to check whether you can pay the interest or not. However, the value of the ‘minimum’ credit score differs from lender to lender. There might be certain VA approved lenders who would offer you a loan even if your credit score is low.
2) You need to go through the appraisal of your home in declining markets – A declining market is a home market where the Fannie Mae decides that the home value is not appreciating but depreciating. In these markets, the VA Lender might ask you to go through an appraisal of your home in order to give you a VA Streamline Refinance loan, even though the Veteran Affairs Department doesn't need you to go through an appraisal for such loans.
These are only few of the situations where you might be denied a VA Loan, even if you are eligible for such a loan under the prescribed standards. To get around such issues, it is advisable to get in touch with a reputed VA approved lender, as they would have VA loan specialists who would guide you on the problems you might be facing and they would also help you find effective solutions to such problems. Therefore, get in touch with such professional VA loan experts and get qualified for a VA mortgage loan with ease.
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