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Hello my fiance is looking into buying a house, his credit isn’t good. It is a 550 and he’s currently cleaning it up, it maybe a little higher. He has a VA home loan and makes 100,000 a year roughly, but his credit isn’t very good. If he were to buy a house at a high interest rate, when his credit improves could he lower the interest rate later?
well he was in the military for 8 years, so I guess he would qualify for a VA homeloan.

9 Thoughts on if I buy a home at a high interest rate can I lower it later?
  1. Reply
    Steve D
    February 6, 2014 at 2:59 pm

    Maybe…nothing is guaranteed, but refinancing is an option.

  2. Reply
    Dr KIA GCG™ Dingo?
    February 6, 2014 at 3:44 pm

    you can refinance at anytime, but you’ll have to pay closing costs again

  3. Reply
    ant
    February 6, 2014 at 4:10 pm

    Yes if the rate is 6% or higher you will want to streamline refinance it in the near future. This way your not going to have an equity loan too becuase he makes good money and you just want the rate lowered. Give it a little over a year for that. If you have a 9% or higher than just dont buy it trust me its not worth the struggle.

  4. Reply
    golferwhoworks
    February 6, 2014 at 5:02 pm

    yes if he can get a loan with that score any VA loan can be streamlined at any point in time with little effort after 12 months of ownership

  5. Reply
    Hokie_Pokey
    February 6, 2014 at 5:43 pm

    He would have to refinance the house to get a lower interest rate.

  6. Reply
    Gabe
    February 6, 2014 at 6:23 pm

    hmm something is murky here because if he is approved for the VA home loan then it should be around 6% or maybe just a little lower. You can always refinance later.
    I mean the bank should look at his finaces and see how much he makes. However if he is a bad money manager it would not matter if he made 1,000,000 a year he would be bad to give a loan, hence his bad credit.

  7. Reply
    prog0m
    February 6, 2014 at 7:19 pm

    You will have to make sure that house has appreciated in the future otherwise you will be stuck with that high interest rate mortgage for a long time. You may want to try to apply for the loan instead if you are a first time home buyer you can probably get that government grant.

  8. Reply
    MonaLisa Overdrive AM VT wannabe
    February 6, 2014 at 7:23 pm

    You can alway refinance later, but rates may not be any lower when he does. Rates are very low right now, so a person with bad credit today might get the same rate as someone with good credit a year or two from now. He should buy what he can afford, and not count on getting a lower rate down the road.

  9. Reply
    Fort Sill Army Wife
    February 6, 2014 at 8:11 pm

    The VA only backs a certain amount of the loan, they do not actually make the loan. The mortgage company will and its next to impossible to get a loan with 550 score, even a VA loan, they are lenient but not the lenient . We just used my husband’s VA loan in January but his score is in the 700’s. With using a VA loan He will have to clear his credit up some, and make sure he has at least the last 2 years of steady payments on his credit report, with no judgements and no late payments, no NSF checks from the bank etc.

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