You've stood beside your veteran or active duty spouse through thick and thin; deployment and PCS. Now you have a chance to make another impact: this time on his or her VA home loan application.
Whether you have a full-time job or stay at home, your life is hectic. That's why I've listed the five most important things you, as a military spouse, can do to improve the likelihood of obtaining a VA home loan on the first try.
There are several different rules when it comes to credit reports and applying for a VA mortgage. A 660 FICO score is a common credit score minimum among some VA lenders.
If you are going to be on the loan as a co-borrower with your spouse, it will be important for both of you to have credit scores above the lender's cutoff. If you're not quite there yet, our Lighthouse program can help you get there. You will want to take a look at these scores at least a few months in advance of when you want to purchase a home. This time give you the opportunity to start working on any problems with the report.
You want to be on the look out for the following red flags on your report:
If any judgments, liens or collections show up on a credit report, confirm their accuracy then get to work on taking care of them.
The cleaner your report, the higher your chance of pre-approval. For example, if you have any unpaid judgments, those will have to be resolved before purchase. If you have a tax lien, see if you can establish a payment agreement. Collections are dealt with differently depending on how large the collection is. As a general rule of thumb, you need to have less than $5,000 in total collections to move forward with a VA home loan purchase.
As you start to clean up any issues on your report, you will see your credit score increase, providing you a two-fold benefit: a higher score and one less hurdle between your family and a VA home loan.
Find out if the state where you will be purchasing is a community property state. If you live in a community property state such as California, even if a spouse will not be on the mortgage, their debts must be considered on the loan application. This means those debts will be included when calculating the applicant’s debt-to-income ratio. If you are purchasing in a community property state, follow these steps:
Become informed about the process and what to expect. We've got a really great step-by-step guide outlining the entire process here. The more familiar you are with the process in advance, the more you can prepare and through this knowledge alleviate some of the stress that comes with the mortgage process.
Most VA home loan applications require that you provide a certain amount of paperwork to verify specific information. If you know that you a mortgage application is in your future start gathering and organizing the following documents now. That way you will have most, if not everything you need when requested. Here is a list of documents you'll need to provide.
Store all these documents in an organized and accessible location such as a traveling file cabinet or a drawer in your home. By keeping them together, organized and accessible you'll spend a lot less time searching during the mortgage application process.
This one is tough, I'm sure. You're already dealing with your spouse being gone for an extended period of time, who wants to also mess with a budget too? Especially if this was a duty your spouse generally handles. If that's the case, schedule a little time before deployment to make sure you understand what is coming in and out each month, then find the most convenient way for you to manage the family budget during deployment. The great thing here is it doesn't have to be complicated.
Whether you write it down on paper or use online software to organize your budget if you keep it simple and stay focused you can keep on track. Of course, there is always that unexpected expense that pops up, so try to build an emergency fund of at least $1,000 to fall back on when the unexpected arises.
By sticking to your budget you can ensure all bills are paid on time and you don't accrue additional debt, both of which will improve your chances of obtaining a VA home loan.
Saving is a pretty boring topic for most people. But, there are some creative ways to get your whole family involved and stir up a little excitement. I've seen lots of great ideas out there and here are a few of my favorites:
As a military spouse you do so much to support your service member. By assisting in this aspect of the VA mortgage process you can make a huge impact on your family's future.
If you have any questions about the VA mortgage process, please don't hesitate to email me at firstname.lastname@example.org.