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Using Simply Ways To Meet VA Guidelines

By admin On July 2, 2010 Under VA Credit Requirements, va income requirements

VA guidelines are simple. Do it their way or else!  Just kidding.  Once you understand the VA guidelines for a loan of any type, everything will fall into place. But if you don’t follow their guidelines then it can almost stop the process.  Isn’t it better to know before hand?   Read on…

The Veterans Administration or VA as some call it, is a guarantor.  That means they will repay your loan if you don’t. They do this the same way banks do it with FDIC. FDIC is the guarantor for banks when you put your money in them.  If something happens to the bank then you can still get your money because FDIC will cover all losses.

The VA is the same way.  If you don’t repay the loan then the VA will pick up the tab but you lose the house or whatever you spent the money on. If you bought a boat and didn’t repay the loan the VA picks up the loan and the boat. So it does pay to repay your loans through the VA.

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VA guidelines use what’s called a debt-to-income ratio. This means they calculate how much money you make to how much money you owe.  This figure tells them how much money you can borrow from them.  The VA guidelines for this ratio are about 43%. If you’re over that number then you may not qualify for a loan. They also factor in your credit rating. Mostly to make sure you aren’t a habitual defaulter. 

In the past, if you’ve defaulted on student loans, credit card or mortgages, the VA would consider you a bad risk, the same as private lending companies. However, the VA looks into the reasons why you defaulted.   They don’t just take your credit report and say you’re a bad risk.  They look into the reason why you defaulted. Something banks and lending institutes don’t do. If you adhere to VA guidelines then you’ll almost be guaranteed a loan.

There are a few things you can do to restore your credit if you haven’t meet the VA guidelines.  If you’ve defaulted or were late on a mortgage payment you can contact the financing company and request a letter stating they were the reason you were late on your payment.   Or if your car payment was late or you didn’t pay because the auto financing company was having problems. Requesting a document stating the reason why is acceptable to the VA. The VA will take these items into consideration when looking at your loan application.

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Another way is to use the prepaid credit card or a secured credit card.  A good starting point is two $500 secured credit cards.  These will go a long way in proving you’re worthy of a loan. A prepaid credit card is a card you pay for up front before you can use the money.  It help build your credit rating.

Adhering to VA guidelines is not difficult but you must follow them in order to secure a loan from the Veterans Administration.

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