In the wake of the holiday season, the latest data from the Weekly Mortgage Applications…
Choosing the right kind of mortgage for your new house does not end at knowing the best type of home loan. The mortgage market is vast, and the number of lenders you can borrow from can work to your advantage.
Today, VA mortgages arguably offer the most competitive features and benefits for our service members who hope to become new homeowners.
In this article, we’ll enumerate these benefits and make a list of the top VA lenders you should be looking up if you have a 600 credit score.
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Benefits of VA Loans
After the Blue Water Navy Vietnam Veterans Act of 2019 took effect on January 1, 2020, veterans looking to borrow money for a new house no longer need to be limited to previously set conforming loan limits. Depending on the location of the house you’ll be buying, you might even be allowed to borrow up to a million dollars for your new home! Today, you can enjoy the VA loan’s zero-down payment scheme no matter the price of your real estate purchase.
Aside from not obligating potential borrowers to make a down payment, many lenders offer great interest rates for VA home loans. Additionally, since the U.S. Department of Veterans Affairs backs this mortgage, VA lenders can rest easier knowing that their money is secure.
When it comes to insurance, there is just a very minimal funding fee you’ll have to pay for compared to the monthly mortgage insurance premium borrowers have under the FHA loan program or the private mortgage insurance for conventional loans. But, of course, how much you’ll need to pay will depend on your entitlement.
But the absolute best thing about VA loans that helps our deserving service members buy a home worth settling in is there’s no actual minimum credit score requirement. So even if you’ve gone through bankruptcy or can’t get eligible for other loan programs, the government can help you find a VA loan that’s right for you.
However, it is crucial to understand that what is valid for one lender may not be accurate for another. While there are indeed many lenders who will gladly accept you into the loan program no matter your credit score, some lenders may require a minimum. Aside from your FICO score, you will also need to be conscious of your debt-to-income ratio, so as with any other type of loan, you’ll want to ensure that you have stable income or employment.
Since you got to this page due to your 600 credit score, it’s essential to know where you stand in the credit score range. After all, your credit score says more about your financial health beyond whether you qualify for a VA home loan.
If we are talking about your FICO Score, a 600 credit score is still many points below the considered Good range to borrow money. However, this is not yet a cause for worry at this point because you’ll find that there are still several options you’ll be able to try out.
If you can afford to delay your home purchase, though, even for at least another month, you can use this time to raise your score by just 70 points to enter the Good FICO Score range. With this kind of credit score, you might find a lot more lenders who’ll be able to give you better offers.
VA Loan Lenders
And so, without further ado, here are the best names in VA lending that you need to Google right after you read this article!
We have chosen these lenders specifically because they accept applicants with 600 credit scores.
1 – Carrington Mortgage
Whether you are looking to get a VA loan or an FHA loan with a low credit score, this mortgage lender is one of those who will do their best to help you get a loan.
Even if you don’t have a credit score to speak of, they could still find a way to get you approved through what’s called manual underwriting. In addition, you can use alternate records of your credit history like statements, bills, and such, to establish your rating in the absence of a credit report. And because Carrington has an A+ rating with the Better Business Bureau, you can rest assured that you are dealing with a trustworthy company to help you with your mortgage loan.
2 – Fairway Mortgage
If you don’t want to worry about the house’s location, you can buy due to the lender you’ll be using; Fairway Mortgage is an ideal choice.
One reason you might find yourself leaning their way is their completely online closing option, so you can avoid the unwanted hazard and inconvenience of going through the process in person during this pandemic. Like Carrington, they can also assist you if you have yet to establish your credit through manual underwriting.
With over 25 years under their belt in this industry, you can be sure that you’ll be putting your mortgage journey into capable hands.
3 – Freedom Mortgage
With Freedom Mortgage, it’s possible to be approved for a VA loan with a credit score as low as 550.
They are a home loan lender who mainly focuses on the VA loan program by ensuring that more creditworthy active duty members and veterans can qualify for the mortgage they need to realize their dream of homeownership.
They might have the most appropriate name for the best lender on this list with their highly competitive VA loan rates and closing costs.
4 – Guaranteed Rate
Hot on the trail of Freedom Mortgage is this next VA loan lender.
Only the third entry on our list can top Guaranteed Rate and give them a run for their money regarding costs and fees. However, they do have the edge regarding the number of branches that can assist you.
Like Fairway, they can offer a fully online application for those who prefer not to step out of their homes. But for those who prefer the traditional method, you can walk in at over 300 retail offices of Guaranteed Rate in 46 states. They are also available to talk to over the phone for customer support and inquiries for any questions you may have regarding your mortgage.
5 – Guild Mortgage
If customer satisfaction is high on your checklist, though, the best lender you may want to go to is Guild Mortgage.
Although they may prefer borrowers with a slightly better credit history and background, you already fit the bill at a 600 minimum credit score requirement.
Through Guild Mortgage, you can enjoy a 17-day closing guarantee which is a big deal when you consider that some closing periods can extend up to 60 days! They also have Lock and Shop, which allows you to hold on to quotations for up to 90 days while you go off searching for a house to buy.
6 – Movement Mortgage
Next, we have Movement Mortgage. Like Fairway, this mortgage lender is available in all 50 states. Established in 2008, they are an excellent option for borrowers looking to deal with a company they can trust even if they don’t have a higher income background to go with their application.
Movement Mortgage’s minimum credit score requirements for VA loans start at 580; It is below the industry VA loan standard of 620, letting you know that they are more welcoming of our brothers and sisters in the military service who have less than ideal payment history. However, you do have to make sure that you already have a credit report they can pull because they don’t entertain manual underwriting.
7 – New American Funding
What makes New American Funding stand out from the pack is its aim to cater to minorities. They even have a Latino Focus Campaign for which they have hired customer specialists who can speak in two languages. It’s no small wonder that they are the no. 1 lender for Hispanic mortgage borrowers in the country.
Although they only operate in 49 out of 50 states, and other lenders on our list might be able to offer more features, they would be your best choice if you are looking for a lender with a heart and will help you through your mortgage journey from day one to last.
The Best VA Loan Lender
Surprise! We’re not going to name a particular company as the very best of all the ones we’ve mentioned.
Know that when you’re getting a VA home loan, you’re already getting the top deal the industry can offer you at this time. It really can’t get any better! However, it’s essential to appreciate that the best mortgage lender for you may not be the ideal one for your neighbor. For example, even if you come from a Latin-American background and your brother who lives in Ohio’s top choice is New American Funding, the same company might not be the best one to choose if you’re getting a house in Hawaii (they don’t operate in this state). Therefore, choosing the right mortgage and lender will always depend on your specific circumstances.
As we’ve mentioned, the U.S. Department of Veterans Affairs has not set any credit score requirements for VA loans, but approval, the lenders will have the final say. Different lenders mean different overlays. We’ve only really talked about credit scores so far, and this is barely scratching the surface! You might still not get approved depending on your debt-to-income ratio or employment situation.
Do your best to shop around and talk to as many lenders as you can! It might also help if you can find borrowers who have successfully gotten approved by other companies we’ve yet to write about. We also want to note that you still shouldn’t be applying at many companies simultaneously, as this can pull down your credit score. It will be more helpful if you do your research first before submitting your application one at a time (if you do get rejected at first).
In our opinion, these names may be the best, but there are so many more companies out there for you to find and try out. We hope we have helped enlighten you in your home loan search.
Safe travels on your mortgage journey!