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My fiance would like to get a loan for us to get a house but his credit score is only 622. Its not that we have bad credit but he’s only 22 and just doesn’t have much. He has no late payments/no collections on his credit report and only 2 loans (one of which has already been paid off ahead of time it just hasn’t been reported yet). Do banks look at your credit report or just the score? And if they look at just the score do you think we could persuade them to lower the interest rate based on a perfect payment history? What interest do you think we can expect to get?

3 Thoughts on VA Loan with 622 credit?
  1. Reply
    February 2, 2014 at 1:27 pm

    The minimum credit score for a VA loan is 580. They consider both your score and your credit report, late pays, charge offs , collections any any other derogatory credit. Since you have a score above minimum and good credit I don’t think you will have a problem in being deemed credit worthy. I assume you know you know you do not to have a down payment and most closing costs, per the VA, have to be paid by the seller. Some other requirements are stable income, debt to income ratios, and that he has enough entitlement to get a VA loan. He will need a certificate of Eligibility, he can get himself, but if he takes his DD214 to the mortgage lender and they can get it faster. I don’t think I’ve left anything out. I have no idea what the interest rates are. You can call any mortgage lender and just ask for the interest rate and the discount points. for a VA loan. If you want a lower interest rate you will have to pay discounts, It could ve anywhere from1% to 5% of the loan amount depending on how low you want the interest rate to be. To estimate whether it’s better to go with the current rate or pay discount points to get a lower rate. Compare the cost of the points you pay to the time it will take you to recoup that money through lower payments and then decide.

  2. Reply
    Sgt Big Red
    February 2, 2014 at 2:12 pm

    When it comes to a mortgage, the lenders are more concerned about income then they are score. Many with even lower scores get mortgages because they have a large income and may have in the past made a mistake that caused their score to drop.

    As to the VA, that is NOT a mortgage, it is simply that the VA guarantees a portion of the mortgage if you default. Also there is no down payment required or points to pay. They (the VA) will do an inspection of the house first to determine it’s true value and condition, if the property does not meet their standards, then the seller will have to bring it into compliance or you will have to look elsewhere.

    Your fiance must go to the local VA and get his certificate of eligibility prior to shopping for a home.

    Hope this helps your question.

    PS don’t you just love those that answer with offers for a loan!!

  3. Reply
    February 2, 2014 at 3:02 pm

    Instead of looking at your payment history for the past 2 years (like FHA does), the VA only looks at the last year. 🙂

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